Aadhaars: Opportunity for India

Several months ago, we told you about the Indian government’s efforts to create unique identification numbers (UID), or Aadhaars, for every citizen of India. Now, just a couple of years into the government’s efforts, the business community is taking notice of these changes and the opportunities they present.

Nearly 8.1 million people have registered for an Aadhaar so far—including the Dalai Lama, who enrolled in April – but there is a long way to go to reach the government’s goal of 1 billion in five years. Still, the UID system is gaining traction throughout India, and citizens and businesses alike are already reaping the benefits.

Opportunities for individuals

Aadhaars have been deemed adequate proof of identity for opening bank accounts, receiving loans, and obtaining mobile subscriptions. Therefore, as individuals are obtaining their UIDs, more doors are opening. In fact, thanks to Aadhaars:

• Daily wage workers are opening bank accounts for the first time ever.

• People previously unqualified for mobile phone SIM cards are obtaining service subscriptions.

• The poor are better able to obtain benefits, thanks to more effective welfare tracking.

In the future, expect to see reduced fraud as individual identity becomes easier to prove.  It will also be possible to hire skilled workers with greater confidence: The UID program will function as a national skills registrar, enabling customers to track a service provider’s credibility and experience.

Opportunities for business

On May 27, the investment news group VCCircle brought together businessmen, investors, architects, and builders in Mumbai to explore the effects of Aadhaars on business in India. The event, VCCircle Insights on the Aadhaar Project, led to some promising insights regarding the future of a variety of industries.

The Information Technology industry could blossom as Aadhaars contribute to new software applications for managing government and business programs. Government welfare programs, such as the Public Distribution System (PDS) for basic foods and Social Security, are using Aadhaars in electronic record keeping. And for the first time, software for the management of electronic records in healthcare and banking is also being developed.

Hardware manufacturing is expected to grow. As Aadhaars make computerization possible in various industries, there will be an increased demand for hardware, databases, and middleware.

Likewise, point of sale devices will become increasingly commonplace in businesses, enabling companies to authenticate identity at the time of service. Depending on the business, these devices may also use Aadhaars to grant access to high-security areas or restricted-access workplaces, as well as at ATMs and during travel.

Opportunities for India

The time is right for India to spearhead these efforts. Our population is growing rapidly, and by tackling the Aadhaars project now, it should remain at a manageable point.

“India had a very small window of opportunity,” Nandan Nilkani, the former CEO of Infosys now leading the Unique Identification Authority of India, said in a recent interview with Knowledge@Wharton. “It has this huge demographic dividend and this young population, but that demographic dividend could well become a demographic disaster if we did not make the right investments in our human capital.”

From welfare distribution and decreased unemployment to employee identification, transparency, national security and beyond, the opportunities for India will continue to grow with the number of Aadhaar registrations.

What opportunities – expected or unexpected – do you think Aadhaars present for the government, businesses, and individuals? What challenges do you anticipate as the UID program moves forward?