Urgent need for independent impact assessment of National UID project

In the absence of hard numbers, it is anybody's guess as to what is the real intent of the UIDAI project. Is the project really meant to help the poor? Or is it just a corporate ruse to link people, track them and do targeted marketing, with the poor being used as a fig leaf to justify the huge spend on the project?

Unique Identification Authority of India (UIDAI) chairman Nandan Nilekani has been very concerned about privacy implications of the National Unique Identification (UID) project. Time and again, he has emphasized that the project could lead to privacy violations. For instance, he said in March of this year and I quote from an msn.com article: "We are also conscious of the privacy issue. In fact the UID database cannot be read by anybody. The only thing you can use it for is authentication. We are making all efforts technically and legally to see privacy is protected," Nilekani, a former Infosys co-founder, told IANS in an interview.
 
"At the same time we need a larger debate of privacy and what laws we need in
the country. Today we don't have any privacy laws," said Nilekani who quit Infosys last year and was handpicked by Prime Minister Manmohan Singh to head the authority."
 
However, as of today, we haven't seen any law on privacy implications that
has been proposed in Parliament.

The publicly available minutes of the recent(6 May 2010) meeting with civil society organizations that the UIDAI had indicates that while UIDAI will draft a law on data security and endorse any potential law dealing with privacy violations, it is not clear if the UIDAI itself considers it as its mandate or even responsibility to come up with the legal framework concerning privacy violations and misuse of the UID database. And if that is the case, that is indeed not just unfortunate but looking at recent developments could even be dangerous.
 
A few days back, UIDAI signed its first registrar. And who could that be?  It was the Life Insurance Corporation of India (LIC). Various media reports have pegged the LIC database size having data of 60 million to 200 million customers.

Some entries of this database namely name, address, and biometrics which LIC will now capture will be shared with UIDAI. What are the   privacy implications of the above?
 
Even granted that the LIC shared only the name, address with UIDAI, the fact is the same entity which has your medical and other vital records now has your fingerprints, iris scans and the UID number. Crores of people buy life insurance or medical insurance from LIC. Lots share their financial data too. For instance, long back when I went to the US for higher studies, I took a loan, which required a guarantee in the form of a, LIC policy. LIC has in its records the fact that I took a loan, and many other details of mine. It is another matter, whether LIC has deleted my name from its database or not, once my policy was matured and I was no longer their customer.
 
A high-priced consultant brain could give LIC ideas on how to increase its revenue.

Share the medical records with a credit card company. Now, say ICICI Bank is the next registrar of UIDAI. Thus, ICICI now has its credit card number mapped with a UID. Suddenly, one day you start getting, along with your credit card statements, advice on how to deal with your diabetes, or worse still an infectious skin disease that you once had and no longer have. God forbid if you have something like HIV. What you apparently missed is a minor report in the newspaper that ICICI Bank tied up with LIC to share their databases. Now consider you are a young man about to get married, and your fiancé sees your credit card statements time and again having this same ad or advice on how to deal with your infectious disease. Chances are, you can kiss good bye to your upcoming marriage. Worse still, your land lady who stays downstairs who has all the time on her hands happens to inspect the covers of your daily letters or credit card statements. The kind of hell that one could go through is only limited by one's imagination. And given the market centric world that we are in, where everyone is out to sell info for money for all kinds of purposes, UID-the common element that unambiguously links the info-is just the thing we do not want. This is just the tip of the iceberg; wait till something like the Income tax department becomes a UIDAI registrar and has your UID.

You could be potentially stopped from boarding a flight going abroad because you have delayed filing your tax returns.
 
Quite interestingly, the UID concept was marketed so that the poor could get government doles and to plug leakages in government schemes. How many of the poor have even heard of LIC leave alone avail of their services?

The UIDAI argument is that LIC has this micro-finance system, which the poor avail of. What is not clear is what percentage of LIC's customer base comprises of these micro-finance customers.
 
In the absence of hard numbers, it is anybody's guess as to what is the real intent of the UIDAI project. Is the project meant to help the poor really or is it just a corporate   ruse to link people, track them, do targeted marketing and the poor are just used as a fig leaf to justify the huge spend on the project? And if both, what are the extents of each? Further, if UIDAI is shirking its responsibility to come up with a legislation that will prevent misuse of the UID from abuse by the state or other parties as mentioned above, the only potential justification for this project-namely security of the nation-also falls through.
 
Finally, I shudder to think of the security issues involved now that apart from the UIDAI database, here is another database-the LIC one which has your fingerprints. One can only imagine of the consequences, given the past records of the security of our government-owned systems.
 
I was always of the opinion that the UID might have been a good concept. But
after seeing the developments-lack of any feasibility or impact assessment study, the whopping escalation of costs (would anyone in his/her sane mind spend Rs30,000 crore on something just based on a few pages written in a book; the latest estimates peg the cost at Rs45,000 crore), and lack of privacy and other laws preventing misuse,   I am getting convinced that the UID project is going wayward. The least that needs to be done is to urgently conduct an independent third-party impact assessment study of the UID project.

And this has to be carried out by an entity which has no potential business interests in the business that will ensue from the UIDAI project, so that they have no vested interests in the results of the study.
 
As I close this, I think of the new India that is emerging in our cities. Whether one likes it or not, lakhs of our young girls escape the drudgery and hunger in their lives in their villages and come to our cities. Some have dreams of becoming an Aishwarya Rai; many work in dance bars. But our country is far from one about equal opportunities. Most end up working hard just to make ends meet.

Many want to get rid of their old identities, which tie them to their past, their caste, what not. They want to create new identities for themselves, forge new relationships with upwardly mobile guys in the city. What use is UID to them? They do not avail of government doles or aren't beneficiary of any huge government schemes.

Their main interaction with the government happens when cops try to extract bribes from them. It is an open question whether the UID will help them or will be more like a millstone tying them irrevocably to their past.

(Dr Samir Kelekar is founder-director of Teknotrends Software, Bengaluru


 

User

COMMENTS

Vijay

6 years ago

The information needs to be guarded like national treasure . No govt or Private party to leak the data of individuals, to be governed my constitutional amendment equal to fundamental rights. Is any Politricking party worthy its salts , we only can keep fingers crossed ,.. God bless Hindustan

vikas

6 years ago

Dr. Samir,

Be positive. Lets give Mr. Nilekani a fair chance.

GASPAR ALMEIDA

6 years ago

Excellent and infomative article. Points to ponder.

AlmeidaG

Udaya

6 years ago

I do not agree with number of thoughts expressed here .First and foremost it is a means of creating identity for the poor who can then use it for opening bank accounts and getting the benefits accorded to them.From the government perspective it is easier for tracking and monitoring.We cannot expect that UID would remove all malfunctions/corruption in the citizen benefit programs but it is a great step forward ..So let us encourage the team which is executing this project ..On the privacy issues I would think that that is something UID should be looking and I am sure Nandan at the top would do whatever is possible to protect UID data.My opinion the advantages are many and lets not block this project by expressing some concern over privacy

anonymous

6 years ago

Hi -

I do agree with a number of your arguments, though I am not entirely sure how privacy relates back to feasibility. Regardless, and I do apologise, but I have to make a non-comment comment. If one were getting married, and had HIV or an infectious disease and hid that from the spouse-to-be, do you not think that that marriage has larger issues than advertisement-based mailing?

Just a thought. Your example, albeit poor, makes a fair point, however.

Abhijeet Bagaai

6 years ago

I think the author will have really look at the benefits of the project to the government. Though the cost of 45k crore is looking high but as of today a in a state like karnataka the is loosing alomost 1000 crorrs due to fraudlent ration cards and diversion of food from real benefieciers. If we look at over all india figures this amount wouldgo much higher. Infact looking at this government would be ablt o rocover the amount withini 2 years itslef with other benefits till to be calcualted. As far a privacy matters fo indiviadual are concenrened government can bring in legistation where this data cannot be used for marrketing purpose as has been done for telelcome telmarketing agencies

Can slash and burn mend the business model of TV18?

The management is very upbeat and analysts see a glimmer of hope since losses are down, but it is really too early to tell whether the company’s operations have merely moved from worse to bad

The TV18 group, which comprises the four businesses of broadcasting (CNBC and CNBC Awaaz), Web (moneycontrol.com and in.com), newswire (Newswire18) and print (Infomedia, which publishes magazines such as Forbes) claims to have reported an “extremely strong quarter” with consolidated revenues of Rs192 crore—a growth of 49% year-on-year. It labels this as a “comprehensive turnaround as TV18 is profitable at PAT level for the quarter”. The company recorded a PAT of Rs31 crore against a loss of Rs140 crore in the same quarter last year. Has there been a genuine turnaround or is it a case of slight temporary improvement? Let’s look at the numbers more closely.

The profit after tax (PAT) for the year came about in the following manner. Revenues increased by about Rs32 crore (a jump of about 20%) and operating expenses got slashed by Rs60 crore or 26%. It is remarkable that TV18 was effectively carrying Rs60 crore or 26% of extra expenditure per quarter! After all, revenues not only suffered as a result of this slash and burn, but actually increased. After this severe belt-tightening, operating profit (after deducting payment to CNBC, US), was Rs21.54 crore or a shade above 11% of revenues. Now, after this operating profit came net interest expense of Rs18.64 crore and depreciation of Rs12.14 crore. So, how did TV18 end up in the black? By other income of Rs21.74 crore. In effect, the core operations are still not making profits at the net profit level.

As far as the segments operations are concerned, Raghav Bahl, group managing director, sounded delighted with the results in a conference call with analysts. He said, “I would say a very deeply satisfying quarter and
year-end for us at Network 18 across all our companies… Revenues were buoyant not just in one or two businesses, but across the group and across every operation… Almost every significant operation is now EBITDA positive in a sustainable way, not just as a single quarter kind of flash in the pan.”

Once again let’s look closely at the segmented data. Some 40% of TV18’s business is broadcasting (CNBC and CNBC Awaaz), the flagship of the group that helps pull in revenues for other businesses. And there, revenues have actually been down even over the terrible quarter that was March 2009, despite the fact that this year’s March quarter revenues were buoyed by the big event of the Union Budget!  In March last year, revenues were Rs91.11 crore. This year it was Rs84.06 crore. So revenues were not really buoyant. And yet, Mr Bahl feels that “the two business news operations, which are the two CNBC channels, really bounced back very strongly and are now displaying the kind of strength that was witnessed in 2007-08 in terms of revenue buoyancy behind them. So the fact that they are back is fairly clear to us from the kind of growth we are witnessing.” If so, this quarter will show it. Web18 revenues were up by just 8.5%. Even on a higher revenue, net profit actually halved. There was a big jump in the revenues of Infomedia mainly because of one-time write back of its Business Process Outsourcing Business and also because revenues from several yellow pages directories were booked in the March quarter. Despite this huge jump in revenues, Infomedia still lost money.

While it is fine for the management to be upbeat about the future, there are lot of issues still with TV18’s core operations. What has saved the day for TV18 in the March quarter was slash and burn of enormous magnitude that should leave investors wondering about even the sanctity of these numbers of earlier years. As for sustainability of revenues and profits, the jury is till open.

User

Eicher prefers a safe, sound—and silent strategy

This company has a track record of doing the seemingly impossible in a quiet and focused manner—its announcement about a game-changing JV with Volvo is one such instance

That Eicher Motors Ltd is once again on a winning streak was best reflected in the way its share prices went up by almost 16% in one day. Historically, this company has a track record of doing the seemingly impossible in a quiet and focused manner, and the recent announcement wherein its joint venture with Volvo is now going to be the global hub for complete manufacture and assembly of truck engines in the 4-8 litre size segment (known as ‘medium’ in the developed countries and ‘large’ in developing countries) was no different. None of the usual song and dance lately associated with any announcement in the automobile world, just a straight forward press conference without alcohol, simply a lot of numbers. So very Swedish, dry, though Peter Karlsten, president of Volvo Powertrain did try to make a joke, which nobody understood.
 
Also present on stage were Siddhartha Lal, managing director & CEO of VE Commercial vehicles, him of the carefully tousled hair and successful track record especially on motorcycles, and Par Ostberg, president, Trucks Asia, Volvo group, and chairman, VE Commercial vehicles—certainly was surprised with the way Asia moved from 7% to 25% of Volvo's global market share. Everybody looked very happy indeed at the announcements, which briefly go like this:- an investment of about Rs3,000 million, an additional production of around 85,000 engines annually for European and Japanese markets in addition to India, Far East and other countries, and everything good for the still distant Euro-6 emission norms.
 
These engines promise to be state-of-the-art and shall go into Volvo vehicles worldwide, as well as in some Eicher VE ones in India, too. Engine life between overhauls is estimated to be around (or more than) one million kilometres. All future low-sulphur diesel requirements will be met. In short, end-to-end manufacture of state-of-the-art engines as well as associated power train elements is now to be done in India, something that was impossible to even dream of a decade or so ago when Volvo Trucks first entered India. There was also some unconfirmed talk on gear-box, hybrids and electronics—but these are cards which they seem to be holding close to their chests.
 
Consider this for a company that made the first totally indigenous tractor in India way back in 1960, took over its German principals in a day and age when such things were unheard of, walked out of its Faridabad factory into the then remote Pithampur in MP when local Haryana politics in the '80s made extremely unreasonable demands, overshadowed its Japanese collaborators when Light Commercial Vehicles were introduced into India in the late 80s, bought over a literally gasping Royal Enfield and turned it around into a global icon . . . the list goes on, to more recently, when they moved into a joint venture with global heavy vehicle leaders, Volvo, in what has come to be known as the benchmark for such collaborative efforts.
 
Is this exciting news from the motoring point of view? Consider this—the engines inside these trucks and buses can do what none of the supercars can do—they can turn the economy around. And this will also force the other heavy vehicle manufacturers into raising the stakes—for the benefit of all concerned.
 
At the beginning of this essay, your correspondent made a comment about a "lot of numbers". In truth, one major emotion was left out of that opening gambit—and that was this—it felt good to see how an Indian company in core automotive technology was now at the forefront and within the heart of heavy vehicle engineering. Worldwide.

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