15 February, 2012

India's impressive Unique Identity Scheme

India's UID scheme forges ahead - see this BBC video report.
India is undertaking a massive citizen identity scheme. To provide a scale of the project - and the scale of its success, here are some numbers:
  • 12 months ago, 1 million year ago had been registered
  • This month, 110 million unique identities (UIDs) have been issued. In total, 200m people have enrolled in the scheme.
  • By the end of January, 400 million are estimated will have their UIDs - this is one third of India's population
These figures are mind boggling - particularly when you consider India notorious bureaucracy.

Below is an interview with the Economist's South Asia's Bureau Chief explaining the system.

Problems? See http://www.economist.com/node/21542763

What are its success factors? 
A combination of interrelated factors

1) Limited and defined scope 
This scheme has been set-up to address the gross inefficiencies in the distribution of welfare subsidies to the poor (distribution of fuel and grain to the poor is cited). These subsidies amass to 2% of India's GDP, so the scale of the problem is huge, meaning there's massive cash savings to made if a marginally more efficient system is implemented. The scheme is aiming to limiting the huge scale of theft by middlemen and waste within the system.

2) Defined and limited aim
Secondly, the aim, at this stage at least, is simply for government purposes. Further research reveals that this isn't quite true. Identity allows the poor to verify who they are and the eligibility for welfare grants. As a result, bank accounts can be opened to allow the receipt of money. I assume that banking facilities will open a flood of consumerism?

This Economist article, Reform by numbers reports an easy win: 
Last week Karnataka state claimed that by paying welfare direct to bank accounts it had cut some 2m ghost labourers from a rural public-works project.

3) Scheme is voluntary

4) Addresses the needs of those 'at the bottom of the pyramid' 

As a result of these two factors, it is pretty compelling.

Negative Factor - Privacy Regulation
One negative factor is that privacy laws in India are weak and haven't kept in sync with the scale of this project.

However, if you are a member of the disenfranchised poor, living 10 to a room with little possessions, concern about privacy pales into insignificance when faced with feeding a family until the end of the week. 

The Future
The expectation is that 400m people will have signed up by the end of 2012: 1 third of india's population - what an amazing achievement

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