Category Archives: Policy & Regulation

Will Aadhaar be the Same with PC as FM?

Well, if media reports have to be believed, P Chidambaram, the Union home minister is all set to return as the finance minister. It does not sound too surprising, considering PC has been one of the best finance ministers that India has had in the recent past. What is more, his track record in the home ministry has been anything but spectacular.  Not only has he failed to achieve much, his tenure has seen continuous friction of his ministry with the states.  In short, his transfer from the finance ministry to home ministry has neither been good for the economy of the country nor for its politics. So his return should be good news for most.

Except those strongly backing UID/Aadhaar.

His dislike of the project—or rather the way it is being rolled out—is well-known. Not only has he disagreed with UIDAI’s way of collecting data, he has written to the prime minister multiple times complaining about it. It is in his insistence that the cabinet discussed in January the possible security loopholes in the way UID was collecting data and decided that while  NPR and UIDAI would use the biometric data collected by each other, in case of discrepancies between UIDAI and NPR data, NPR would prevail.

Again, as recently as last month, he had written to the PM that UIDAI was not cooperating with Registrar General of India (RGI), which was working on the NPR. This is what Mint had reported, quoting from the letter.

“The decision of the cabinet is crystal clear and I am unable to comprehend the reluctance of UIDAI to allow the NPR camps and to accept the NPR data. I had taken these issues with Nandan Nilekani, chairman, UIDAI, dated 14.05.12. The home secretary (R.K. Singh) has also discussed the issue at length with the UIDAI director general and mission director. However, despite our best efforts, issues remain unresolved,” he said.

It is difficult to believe that once he takes charge of finance ministry, his opinion about the Aadhar project would change drastically.

The question is: will it impact the effectiveness of UIDAI?

While it is true that UIDAI is part of the Planning Commission, the reason it became the government’s flagship program so soon is because of strong support from the former finance minister Pranab Mukherjee. Not only did Mukherjee generously provided for the funding of the project in three of his budgets, he made it the basis (aadhaar) of most of the government programs. There were nine reference to Aadhaar in Mukherjee’s budget speech this year. Whether it is for subsidy being credited directly to beneficiary’s bank account, creating a more efficient public distribution regime by creating a PDS network, or for disbursement of government payouts—such as MG-NREGA payments, pensions and scholarships—the finance minister seemed confident that Aadhaar could be leveraged as a platform to deliver. National Payment Corporation of India (NPCI) even created the Aadhaar Payment Bridge Systems.

In short, while the UIDAI chairman Nandan Nilkeani created a new generation platform in form of Aadhaar, it is Mukherjee who was instrumental in making it the flagship platform of all developmental activities in India. So much was Mukherjee’s liking for Nilekani that he made him head some half a dozen task forces, groups, and committees entrusting him with most changes. I wrote about it in a post in this blog earlier called The Importance of Being Shri Nandan Nilekani. Mukherjee had even gone to the extent of openly backing Nilekani on PDS reforms when the food ministry was ignoring the recommendations of a committee headed by him.

From there, it would be quite a change for Aadhaar/Nilekani if Mukherjee is succeeded by someone who very recently complained so strongly about the project to the prime minister, taking the name of its chairman.

Things would probably have been a little different had the UIDAI been a independent statutory body. A proposal to make it one was rejected by a Parliamentary Standing Committee headed by Yashwant Sinha a few months back. Interestingly, in its report, the Committee had extensively quoted news reports about the home ministry’s objection to/criticism of Aadhaar to justify its decision.

Both Chidambaram and Nilekani have proven track records. The country will benefit if they work in tandem. Another conflict in the government is the last thing that we want in the time of this apparent policy paralysis. Not only will it make another fresh and fairly successful experimentation in the government go astray, any drastic change in the path will make very wrong signals to international community. After 2G decision and GAAR, the last thing the country would like to see is going back on UID plans.

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RBI Slashes Debit Card MDR

In a circular issued by RBI on 28 June 2012,  the central bank directed the commercial banks to cap the debit card merchant discount rates (MDR) at 0.75% for all transactions upto Rs 2000 and at 1% for all transactions above Rs 2000.  On 28th May 2012 — that is exactly one month before this directive came — in a post titled Containing Black Money: Promoting Debit Card Usage Holds the Key, in this blog, I had argued that increased usage of debit card could go a long way in reducing the black economy.

This is what I wrote

RBI can well go proactive on promoting use of debit cards, as they provide a risk free way for banks to increase electronic payment. Just asking banks to promote/build awareness on debit cards can go a long way in growing the use of debit cards. Removing artificial blocks like high transaction fees can further accelerate the trend.

RBI noted in its circular that debit card is a secured product with the card usage being linked to the availability of funds in the accounts of the customers whereas credit cards are a part of the unsecured credit product portfolio of the issuers and there was no rationale for having similar MDR for both.

“Given this scenario, it is necessary to encourage the use of debit cards, especially at smaller merchants/service providers and location by way of lower MDR. This move would encourage all categories and types of merchants to deploy the card acceptance infrastructure and also facilitate acceptance of small value transactions. Further, in the case of the acquiring banks, a certain element of guarantee on the Return on Investment (ROI) is required for deepening the card acceptance infrastructure. A lower MDR with the expected increase in transaction volume on account of network effects would result in a reasonable ROI for acquiring banks,” said the circular.

Could not agree more!

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National Citizen Database/Unique ID: Is Chidambaram Speaking the BJP Language?

It is ironic. The Bharatiya Janata Party (BJP) may be baying for his blood after Madras High Court rejected Union Home Minister P Chidambaram’s Plea in his Lok Sabha election case, but the minister is actually fighting a bitter battle within his own government to implement a plan that was, by all means, envisioned by the BJP.

A large section of media has reported that the home minister has complained to thePrime Minister about the Unique Identification Authority of India (UIDAI) (part of Planning Commission) not cooperating with the Registrar General of India (RGI) (under Home Ministry) in a letter. Both are collecting biometrics based data of people–UIDAI for issuing Aadhar numbers and RGI for its National Population Register (NPR)

In a report today, this is what Mint said

In his letter to Prime Minister Manmohan Singh last week, Chidambaram accused the Nandan Nilekani-led UIDAI of not following the 27 January cabinet decision where it was agreed that the purposes of UIDAI and the home ministry-led National Population Register (NPR) project were different. Under this truce, both projects were to continue simultaneously and each would use the biometric data collected by the other. Also, in case of discrepancies between UIDAI and NPR data, NPR would prevail.

“Despite these directions from the government of India, UIDAI is objecting to the conduct of the NPR camps in certain states and is also refusing to accept the biometric data of NPR for de-duplication and generation of (the) Aadhaar numbers,” he said in the letter, which was reviewed by Mint.

“The decision of the cabinet is crystal clear and I am unable to comprehend the reluctance of UIDAI to allow the NPR camps and to accept the NPR data. I had taken these issues with Nandan Nilekani, chairman, UIDAI, dated 14.05.12. The home secretary (R.K. Singh) has also discussed the issue at length with the UIDAI director general and mission director. However, despite our best efforts, issues remain unresolved,” he said.

On the face of it, the fight seems to be about the data collection. But there is a bigger issue. And no, it is not about ego clash between Chidambaram and Montek Singh Ahluwalia. Or if it is, we do not know that. The big issue is that while both UIDAI/Aadhar and NPR are collecting data for creating citizen databases, their objectives are entirely different. And hence the details vary. While it certainly is a laudable idea that there should be no duplication of efforts and national resources for doing similar kind of work, it requires more than a cabinet meeting to pan out how that could be done. Else, the cabinet decision is like a patchwork; pushing the dirt under the carpet.

Without getting into too much details, there are certain important differences that must be pointed out.

One, the sacrosanct thing in the Aadhar number  is the number. There is a card but that is like a PAN card. The card is just a piece of plastic. It is the number that matters. On the other hand, the citizen card would be like a passport (or so it is believed). It is not just the number but the physical document that is important.

Two, the Aadhar number is not mandatory; the citizen card would be mandatory. That is a major difference.

Three, the Aadhar number—since its main aim is to facilitate the smooth access to services like banking—could be issued to anyone residing in India, even a foreigner. The citizen card of NPR is a proof of citizenship.

The above two characteristics of UID together ensure that the Aadhar number is neither a necessary nor a sufficient condition to citizenship of India. That is the whole purpose of the resident identity card of NPR.

These differences are fundamental. The Aadhaar project was launched by UPA to ensure financial inclusion, which was a big requirement for achieving social inclusion, UPA’s top election promise. The way in which NPR is being projected suggests that central to it is security. “The resident identity card programme was launched in India’s nine coastal states after the 2008 Mumbai terrorist attacks. The home ministry is seeking to extend the scheme to the rest of the country and has sought Rs. 6,700 crore to fund the program,” reported Mint.

Interestingly, this is what was originally BJP’s idea. In a story that I did in Dataquest, way back in January 2010, I had pointed this out. Calling it “Inclusion Vs Security”, I argued that while the central idea behind BJP’s national citizen database was security, it was inclusion that drove UPA’s agenda when it created UIDAI.   “While it is true that it was the NDA government that had taken the first step on creating a national identity system, its objective was entirely different,” I wrote. I cited an August 2003 press release issued by PIB on this.

“Illegal migration has assumed serious proportions. There should be compulsory registration of citizens and non-citizens living in India. This will facilitate preparation of a national register of citizens. All citizens should be given a Multi-purpose National Identity Card (MNIC) and non-citizens should be issued identity cards of a different color and design. This should be introduced initially in the border districts or may be in a 20 Kms border belt and extended to the hinterland progressively. The Central Government should meet the full cost of the identity card scheme”.

This is exactly what Chidambaram’s home ministry is now talking about. In fact, even in 2009, BJP’s Elections Manifesto had an IT vision in which a lot of emphasis was laid on this (MNIC).  It claimed that the centrepiece of the implementation of the BJP’s IT Vision is the Multipurpose National Identity Card (MNIC). This is what the vision document said.

We would amend the Citizenship Act, 1955, to combine the offices of the Registrar General of the Census of India and that of the UIAI to set up a Citizenship Regulatory Authority of India (CRAI). The CRAI would be responsible for maintaining a National Register of Citizenship (NRC), and keeping it current up to the minute.

This is what the BJP IT vision said further.

The amended Citizenship Act would make it mandatory under law for all citizens to acquire an MNIC, and parents of newly born infants would have to apply for one for their child, immediately after the baby’s birth.

So, whether it is the “mandatory” requirement, NPR (BJP’s NRC) or starting with coastal areas (BJP’s border belt), the home ministry idea is an exact reflection of what BJP wanted. In fact, these differences were also the basis of the Parliamentary Standing Committee on Finance headed by BJP MP and ex FM Yershwant Sinha for sending back the National Identification Authority of India Bill, 2010. “The Committee have received a number of suggestions for restricting the scope of the UID scheme only to the citizens and for considering better options available with the Government by issuing Multi-Purpose National Identity Cards (MNICs) as a more acceptable alternative,” it noted. MNIC was BJP’s phrase.

What Chidambaram’s home ministry is doing is to reintroduce BJP’s plan under a different name. Not surprising considering Chidambaram has been a hardliner when it comes to security.

So, which one is a better objective? There is no straight answer to that question. But as I had pointed out in another story, The Politics of Identity, in Dataquest after the Sinha-headed committee sent back the bill, “the primary objectives of the two projects, though their means are the same, are completely different. To measure one with the yardstick of the other, is not just unfair but would never yield any result.”

Even if one can debate this versus that, it is too late to do that as the government has decided to go for both. The good idea is that someone is thinking about minimizing on the national resources. But that is easier said than done.

While I did point out the fundamental differences between the two projects above, there are some more differences that have come the way that the two are being implemented. And while they are less sacrosanct to be changed, they need to be examined before one tries to work out a synergy.

One, UIDAI, in its wisdom, has decided that it would respect citizen’s privacy, something that is traditionally not a big issue in India but increasingly, citizens are getting more concerned about their privacy. UIDAI has taken a proactive stance on that. So, it is looking at collecting only the essential information for identifying and no more. NPR wants to have all the information and still operates with philosophy that government has all the rights  over citizen. While that is essential for somebody trying to ensure security, it should happen only when the government ensures that there is no information leakage.

Two, UIDAI has taken a mission/marketing approach rather than a typical government mandated top-down approach. It has marketed the program, got buy-ins from partners and has shown the benefits accrued to each stakeholder such as banks, telcos and state governments because of Aadhaar. By doing so, not only has it created a feeling of ownership, it has managed to share the cost of collection of data. NPR wants to do a massive centralized exercise.

While it is true that both are trying to collect similar data and hence should cooperate with each other to avoid wasting of national resources, it cannot just be wishful thinking. It has to be planned out properly. One thing about Aadhaar project is that, all its small flaws notwithstanding, it is fairly thought through program. It is halfway. The Finance Minister Pranab Mukherjee has emphasized its significance many times. Most of the development programs of the government now use Aadhaar as a platform. In fact, this year’s Budget speech had as many as nine reference to Aadhaar. So, you cannot do something that creates problems for UID project. That will affect all these development programs.

But NPR, even though it is an original BJP idea, is an important requirement too for security. And the fact that the government has decided to pursue it with all seriousness means going back in not an option. Certainly, duplication of efforts is certainly not a great idea.

The two projects have no option but to find synergies. But it cannot just be wishful thinking. It has to be thought through further. It requires more than a cabinet meeting or a letter by the Prime Minister for that.

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Open Government Platform: Beginning of A Great Journey

In the next few hours, the Union Minister for Communications & IT, Kapil Sibal, is expected to announce the launch of open government platform, in the presence of some representatives from the US government. This will be the first major announcement after the cabinet approved the National Data Sharing and Accessibility Policy (NDSAP) 2012 last month.

The idea of open governance, spearheaded by the US, under then then Federal CIO Vivek Kundra, has been gaining popularity the world over. The Open Government Partnership  is a multilateral initiative that aims to “secure concrete commitments from governments to promote transparency, empower citizens, fight corruption, and harness new technologies to strengthen governance.”

The Open Government Partnership as a global partnership is not too old and started just about six months back. Formally launched on 20 September 2011, with an initial declarationby eight countries—Brazil, Indonesia, Mexico, Norway, Philippines, South Africa, United Kingdom, United States—the partnership now has 53 member countries, including the original eight.

With its time-honored policy of under-commitment, India is yet to formally join the partnership but is working with the US government to work on open access to data.  To become a member of OGP, participating countries must embrace a high-level Open Government Declaration; deliver a country action plan “developed with public consultation”; and commit to independent reporting on their progress going forward.

It may be noted here that publishing data collected by government is just one—though, at present, arguably the most important—aspect of the move towards this openness.

The Platform

While the actual beginning of the move towards open government began with President Obama signing the Memorandum of Transparency and Open Government on Day One of assuming office, it was with the appointment of Vivek Kundra as the Federal CIO that the real momentum started. Barely two months after his appointment in March 2009, Kundra launched Data.g0v platform (in May), for providing public access to raw datasets generated by the Executive Branch of the Federal Government in order to enable public participation and private sector innovation. It drew from the DC Data Catalog launched by Kundra when he was CTO of Washington, D.C., where he published vast amounts of datasets for public use.

Though open government is a broader objective and is not just about releasing raw government data, this was nevertheless considered a major step, as the public availability of these datasets would not only help in transparency and openness, it also would allow anyone who wishes to do so—companies, individuals, NGOs—to create innovative applications using these data. And it actually did.

But when Kundra announced his resignation in June last year, there was a lot of apprehension whether the open government movement will lose its momentum. Many believed Kundra’s resignation was because of a drastic cut in funding for the e-government initiatives that he had undertaken. In a column titled, The Death of Open Government,  in Washington Post, renowned technologist, academician and commentator was drastic in his observation.

But, with Kundra gone, I am not optimistic about the program. Whenever a program loses its key evangelist, it normally dies. The Open Government Initiative is likely to suffer a slow, inevitable death.

But nevertheless the progress continued.

And when there is something around IT, can India be kept out of it? When the US government started to look at open sourcing the data.gov platform, India—the land of techies—was of course, the first stop. And this began around August, even before the Open Government Partnership was announced. India was not to be a member of that; it still isn’t.  But when it comes to tech work, the world’s most business savvy nation, surely knew where to turn to.

In December, it was publicly announced that India and US were working together to create a platform, called data.gov- in-a-box, an open source platform that would help governments globally to produce their own version of data.gov. This is what the data.gov site said at that time.

Among the actions in the U.S. National Action Plan announced by President Obama is an effort under the U.S.-India Strategic Dialogue to produce “Data.gov-in-a-Box,” an open source version of the United States’ Data.gov data portal and India’s India.gov.in document portal. The U.S. and India are working together to produce an open source version available for implementation by countries globally, encouraging governments around the world to stand up open data sites that promote transparency, improve citizen engagement, and engage application developers in continuously improving these efforts. Technical teams from the governments of the U.S. and India have been working together since August of this year, with a planned launch of a complete open source product (which is now called the Open Government Platform (OGPL) to reflect its broad scope) in early 2012.

Today is that day, when that formal announcement about that platform is likely to happen by the Indian IT minister.

All the best for the journey together of two great nations, which are not just the most influential democracies in the world but are also the most competent when it comes to IT. And nothing marries democracy and technology like this initiative does. It takes the tool to be transparent on a platter to the governments around the world.

Additional Note: This should also convince critics of outsourcing to India (many within the Obama administration itself) that companies that seek Indian help in IT  do not do that just because it is low cost.

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