Is Nandan Nilekani acting as an agent of non-state actors? –Part XI

Nandan Nilekani-led TAGUP recommended setting up goods and services tax network (GSTN) as national information utility or NIU, a private IT company, to take away the sovereign function of tax collection and data storage from the government. This is in addition to handing over biometric data of Indians to MNCs under the Aadhaar scheme

Lessons from Indian history and political correctness of historical personalities seem to have become the flavor of the electoral campaign in the run up to the upcoming general elections. There can be no politics without history. Such debates were long due. When Bharatiya Janata Party (BJP)’s prime ministerial candidate Narendra Modi committed mistakes about facts of history, he was rightly corrected. But why is there a deafening silence when Congressman like Nandan Nilekani, an official of the Planning Commission, distorting history of India’s First War of Independence to rewrite the history of the formation by Indian National Congress? It was founded by a butcher of Indian revolutionaries.

Nilekani writes about AO Hume, a former civil servant of British East India Company and the father of Indian National Congress was educated at East India College, in his book, “Imagining India”. In a deliberate act of fraudulent misrepresentation of fact, he states that in 1885, the “Indian National Congress was founded by Allan O Hume, a British political reformer and avid birdwatcher, who had sided with the Indian soldiers during the army mutiny.” The indisputable fact stated by Hume himself is that he was with the soldiers of British East India Company and not the Indian soldiers.   

As a recruit of Indian Civil Service of British East India Company, he was magistrate and collector of Etawah district in today’s Uttar Pradesh, which is Mulayam Singh Yadav’s constituency. Hume’s friend Colonel CHT Marshall of the Indian Army wrote, “Allan Hume joined the Bengal Civil Service in 1849, towards the end of his twentieth year. Before he had been nine years in India, the great Mutiny of 1857 broke out, and he had many opportunities of showing his capabilities as a soldier as well as a civilian.” After May 1857, especially between 17 June 1857 and 30 December 1857, he remained hidden in Agra Fort. But, by 6 January 1858, he managed to re-occupy the town of Etawah.

Hume, in his own report, says, “On April 21 (1858) we made a most successful cavalry attack on a party of Roop Singh's at Ajeetmul, and though the enemy were in great force all round, drove them with the loss of seven men helter-skelter into the ravines. The audacity of this attack, for the time, completely frightened the rebels. Next day, by a very pretty combined movement from two directions, we surprised the enemy, cut up fifteen, took prisoner and hung three...” (Source: Allan Octavian Hume, Father of the Indian National Congress: 1829-1912, by Sir William Wedderburn, Bart., 1913)

In such a scenario, why is Nilekani feigning ignorance about the fact that for Hume, Indian soldiers, who became revolutionaries were the “enemy” and he has recorded how he had killed many of them.

Nilekani’s term as a chairman of Unique Identification Authority of India (UIDAI) holding cabinet minister’s rank ends in July 2014. How will he be held accountable and made liable for his acts of omission and commission during his tenure? Why no one especially from among the non-Congress parties is correcting him? Do they feel intimidated by him and his powerful civilian and non-civilian allies?

It is noteworthy that Nilekani mentions that his book began with the encouragement from Ramchandra Guha, the historian. Had Guha read the book prior to its publication, he must have given Nilekani the correct lesson in history about the role of Hume in 1857. Equally notable is the fact that barring five-six people like Upendra Baxi, Jean Drez, Prof Trilochan Shastry, Rajeev Chandrashekhar, MP and Yashwant Sinha, the former finance minister, most of some 200 personalities including Guha that have been acknowledged in Nilekani’s book either support the biometric profiling of Indians or chose to maintain studied silence. These personalities do not seem to realise that they have wittingly or unwittingly become part of the UIDAI chief’s “positive coalition of people who have a stake in its success.” Nilekani has admitted that “there is a huge coalition of…organisations, governments, banks, companies, others who have a stake now” in the future of biometric database. The idea was/ is to “create a positive coalition that has the power to overpower or deal with anyone who opposes it.”

Guha’s exhaustive work on Mahatma Gandhi must have revealed that Gandhi had referred to biometric identification ordinance in South Africa as a Black Act and had opposed it with the Chinese community and was supported by Gopal Krishna Gokhle when he visited him in South Africa. Sudheendra Kulkarni, currently with Reliance Industries supported Observer Research Foundation, is among those acknowledged in the Nilekani’s book. Kulkarni, who has also written a research-based book on Gandhi must have encountered his opposition to biometric identification and indiscriminate finger printing of Indians. Among the journalists Vir Sanghvi and Ram Manohar Reddy have been referred to as the “finest editors in India” in the book. Dalit writer, Chandrabhan Prasad, Yogendra Yadav, one of the founders of Aam Aadmi Party, Mahesh Rangarajan, Director, Nehru Memorial Museum and Library (NMML) and Anantha Padmanabhan, currently with Amnesty India, are notable mentions in the book.

Mahesh Rangarajan seems to have paid the debt of having been acknowledged in the book by inviting Nilekani to deliver a public lecture on ‘India and the Third Industrial Revolution’ on 10 October 2013 at NMML. It is claimed that Third Industrial Revolution, which refers to use of computers, the web and mobile phones from 1960 onwards provides unique opportunity to find 'leapfrog' using products and technologies. This claim is suspect. It was claimed that first industrial revolution was based on steam and railroads and the second one was based on electricity, internal combustion engine, running water, indoor toilets, communications, entertainment, chemicals and petroleum.

NMML provided a platform for the advocacy of legally questionable biometric identification technologies and helped propagate the propaganda of the technology companies, which have been debunked by European Court of Human Rights besides China, UK, France and Australia.

One is yet to hear the position of Amnesty India on indiscriminate biometric identification. Silence is also a position for sure.

It is quite strange that just because Nilekani has acknowledged them in his book these personalities seems to have entered into some stated or unstated Faustian pact with him. Unless they have been promised some share in the booty by the data mining mafia, why are they tongue tied on the issue of mankind’s biggest biometric database. Intellectual courage is an endangered species, it seems.   

Why is Nilekani being allowed to distort language and commit linguistic corruption to take away the sovereign function of tax collection from the government and hand it over to National Information Utilities (NIUs) which is purported to be a private company with public purpose and which has profit making as motive but not profit maximizing. In his book, which was first published in 2008, Nilekani states that “NIUs would be databases that amass information…” He is deeply worried because “This makes zeroing in on a definite identity for each citizen particularly difficult, since each government department works as a different turf and with different groups of people.” He quotes the then chief election commissioner, N Gopalaswamy who said that “Our databases are in these disconnected silos.” It seems he considers the entire political class to be comprised of intellectual pygmies which cannot see through his machinations.

In a startling revelation it has come to light that in an unprecedented move country’s most sensitive financial data, entire tax data of Indians has been turned over to a private firm, set up as a special purpose vehicle (SPV) named Goods and Services Tax Network (GSTN), an IT company on the recommendations of Nandan Nilekani-headed panel. Legislators, informed citizens and institutions must act to stop the takeover of Government’s sovereign function of tax collection by a private company. GSTN is supposed to provide information technology support under the proposed Goods and Services Tax (GST). There is no provision for data security in it.

GST is a value-added tax, which is expected to replace all indirect taxes on goods and services imposed by the Centre and Indian states. GST will replace the state VAT, central excise, service tax and a few other indirect taxes will be a broad-based, single, comprehensive tax levied on goods and services. It will be levied at every stage of the production-distribution chain by giving the benefit of Input Tax Credit (ITC) of the tax remitted at previous stages. GST is based on a destination-based taxation system, where tax is levied on final consumption. It is expected to broaden the tax base, foster a common market across the country, reduce compliance costs, and promote exports. The GST will be a dual tax with levy by both central and state tax administrations on the same base. The GST demands a well-designed and robust IT system for realising its potential in reforming indirect taxation in India. The IT system for GST would be a unique project, which will integrate the central and state tax administration.

While presenting the Union Budget in 2011-12, the then union finance minister Pranab Mukherjee informed the Lok Sabha that Technology Advisory Group for Unique Projects (TAGUP) headed by Nilekani, chairman, UIDAI has submitted its report dated 31 January 2011 and its recommendations have been accepted in principle. Other members of the TAGUP included CB Bhave, the then chairman of SEBI, R Chandrasekhar, secretary at the Department of Telecommunications (DoT), Dhirendra Swarup, former chairman of PFRDA, S Khan, former member of CBDT, RV Ramanan, former member, of CBEC and Dr Nachiket Mor, chairman of IFMR Trust.

This was a follow up what the union finance minister had said in his Budget Speech of 2010–2011 with regard to the setting up of TAGUP. Para 104 of the Budget speech reads:

“An effective tax administration and financial governance system calls for creation of IT projects which are reliable, secure and efficient. IT projects like Tax Information Network (TIN), New Pension Scheme (NPS), National Treasury Management Agency (NTMA), Expenditure Information Network (EIN), Goods and Service Tax (GST), are in different stages of roll out. To look into various technological and systemic issues, I propose to set up a Technology Advisory Group for Unique Projects under the chairmanship of Shri Nandan Nilekani.”

The TAGUP report states, “In recent years, government functioning in general and specific projects in particular have come to involve complex Information Technology (IT) system development. Five projects stand out:

1.     Goods and Services Tax (GST)

2.     Tax Information Network (TIN)

3.     Expenditure Information Network (EIN)

4.     National Treasury Management Agency (NTMA)

5.     New Pension System (NPS)”.


It claims, “These five projects alone have immense transformative power and can change India’s growth trajectory.”

The report reads: “The group recommends that a class of institutions called National Information Utilities (NIU) may be put in place to handle all aspects of IT systems for such complex projects.”

As conceived by the Group, NIUs would be private companies with a public purpose: profit-making, but not profit maximizing,” the report adds.

NIU is manifestly an exercise in linguistic corruption with the aim of ‘building a coalition for change’.

TAGUP report claims that this concept is not new. It cites comparable examples like National Securities Depository Ltd (NSDL), National Payments Corporation of India (NPCI) and Centre for Railway Information Systems (CRIS). The report underlines that “The UIDAI published early on, the UIDAI Strategy Overview that described the strategic vision, from which many aspects of implementation have been derived.”

The TAGUP report reveals, “GSTN is an NIU that is being set up to serve multiple levels of Governments (Central and State) in GST”. It also states that “The IT Strategy for GST was defined and accepted within Government even before the NIU was selected.” Notably, IT Strategy for GST was also defined by Nilekani.

GSTN has been given birth as private limited company amidst opposition from chief ministers and officials from the Central Board of Excise and Customs (CBEC). GSTN has been set up on equity of just Rs10 crore. Government has provided it a one-time grant of Rs315 crore. Notably, although the Government has funded this start-up, it does not even have majority control.

GSTN headed by Naveen Kumar, former chief secretary of Bihar, is meant for controlling all new indirect tax data from the Centre and states.

Union finance ministry has compelled the CBEC and Central Board of Direct Taxes (CBDT) to sign memorandum of understanding (MoU) with GSTN for sharing the data. This is to ensure that GSTN will be able to access and process the entire tax data-both direct and indirect taxes. The finance ministry has also asked CBEC to hand over the processing of data for tax surveillance to GSTN. This has been done without any security or privacy safeguards.

It is noteworthy that Tamil Nadu chief minister J Jayalalithaa had sent a letter dated 18 August 2011 to non-Congress chief ministers urging them to stridently oppose the introduction of a Goods and Services Tax (GST). She argued that it would affect the fiscal autonomy of the states. In the light of the proposal for GSTN, Jayalalithaa’s opposition has been proven right because as per the plan, entire individual data—direct and indirect taxes—including registration, return and payment by taxpayers will be in custody of a NIU. It is a case of handing over of public data to a private entity. It is akin to day light robbery.

While rest of media turned a blind eye, Open magazine did a cover story ‘Guess who can see your tax data’ (22 August 2013) and a New Indian Express story ‘Aadhaar cut down to size, data mining projects raise concerns’ (29 September 2013) underlined how NIUs like GSTN are linked to biometric UID/Aadhaar number. Supreme Court’s verdict on the legitimacy, legality and constitutionality of this identifier is likely to impact NIUs as well.

In November 2011, Sheila Sangwan, then member (Budget and Computerisation), had summarised the problems with the GSTN related proposals: ‘…a meeting was held on 14/15 November 2011 in the chairman’s office (SK Goel) to discuss the structure and functions of the proposed GSTN… Dr Nandan Nilekani has mentioned as minuted that there is need to go in for the SPV even without GST being introduced. ..There was unanimity amongst the officers present that the sovereign function to be performed by the tax administration should be kept out of the purview of the GST.’ It was noted that ‘Across the tax administration in the world, the privacy of taxpayer data is accorded utmost priority and it is the practice to house this data in Government hands…’ So far the chairman of CBEC has not addressed the essential question of who would be the repository of the data.

Strangely chairman of CBEC wrote that, ‘With regard to the concern of IT security, it is not connected to the ownership of the management—government or non-government. In fact, the level of security is dependent upon the standards, safeguards and control processes that are put in place by the management. The GSTN could be asked to build necessary safeguards for ensuring the security and privacy aspects…With regard to the legislative route to set up SPV as government entity, it is in complete contrast to the decisions taken in the past and it would jeopardize the consensus achieved so far and bring the discussions back to square one.’

Why is the CBEC made to hurry to comply with the whims and fancies of Nilekani and his coalition partners given the fact that the UIDAI chairman has never taken oath of office and secrecy?  

It has been reported that Naveen Kumar, the head of GSTN was asked about control of the data. He said, “We will start from scratch with our own servers and beginning with a list of dealers we will start building a database of transactions on our system. For this, we do not need additional data from the Customs or any other department.” It is quite evident that servers of GSTN, a private company will be stored in a grid of sort.

‘No taxation without political representation’ was the battle cry of the American Revolution. The issue is how GST can be imposed when there is no political representation in the GSTN. Chief ministers of all non-Congress states and all the non-Congress parties be vigilant against the subversion of hard earned rights of true political representation in matters of taxation.

Such initiatives will lead to handing over the control over indirect and direct tax data to GSTN for tax profiling and surveillance without any legislation passed by Parliament, the personal sensitive information like biometric data is being handed over to UIDAI and its partner companies like Accenture from the US and Safran from France. This undermines citizens’ sovereignty, states’ autonomy and national security for good.    

Coincidentally, Jeewan Lal, whose treachery led to the victory of British East India Company over Indian revolutionary soldiers in 1857 was associated with the introduction of Income Tax in India in 1860 along with James Wilson, a fee trade activist who became British India's first finance minister (called finance member then). It was introduced to overcome the losses on account of the ‘Military Mutiny’ of 1857 by Indian revolutionary soldiers after British government realized that it cannot govern India indirectly through the fiction of the East India Company.

As finance minister, a chapter ‘Extended and Specialized Lending,’ in Silent Revolution The International Monetary Fund 1979–1989 by James M Boughton published by IMF in October 2001, it is revealed that Congress prime minister Indira Gandhi “gave the go-ahead to enter into secret negotiations” with IMF, following which on 25 November 1980, RN Malhotra, secretary for  Economic Affairs at the ministry of finance “visited the Managing Director at the Fund to signal his country’s interest in obtaining a credit. In January 2011, Pranab Mukherjee too announced that India has “voluntarily sought a full-fledged Financial Sector Assessment Programme” from International Monetary Fund (IMF) and the World Bank. This is similar to the voluntariness displayed in the drafting of Sixth Plan (1980-1985) after secret negotiations with the Bank.

In arrangement under the Extended Fund Facility (EFF) offered the option of longer-term credits. The first negotiating mission went to New Delhi in January 1981, led by Tun Thin, director of the Asian Department. The then finance minister, R Venkataraman, met with IMF’s managing director in Washington and subsequently signed and submitted the Letter of Intent (LoI) on 28 September 1981. Following the IMF’s approval for EFF, Indian National Congress-led government faced massive criticism for subjecting itself to IMF’s conditionality.

In an exercise of sophistry, this government argued that “the EFF arrangement did not impose conditionality at all, because it was fully consistent with the policies that were already incorporated in the Sixth Five-Year Plan”. After having internalized the conditionality imposed by IMF, Indira Gandhi informed the Parliament that “the arrangement does not force us to borrow, nor shall we borrow unless it is for the national interest. There is absolutely no question of our accepting any programme, which is incompatible with our policy, declared and accepted by Parliament. It is inconceivable that anybody should think that we would accept assistance from any external agency which dictates terms which are not in consonance with such policies.” This IMF publication unequivocally establishes that Indira Gandhi lied to the Parliament and misled the nation.

GSTN is being created with an ulterior motive to bring it under the financial sector surveillance program of the IMF, World Bank Group in continuation of the policies pursued since the days of Indira Gandhi. These policies have made India servile to the dictates of the Bank. GSTN helps the Bank to make deeper inroads and erode the financial sovereignty of the country in complicity with the ruling party.   

Foreign Policy magazine of the Washington Post company listed Nilekani, apparently a protégé of Mukherjee as one of the Top 100 Global Thinkers in 2010. This was prior to disclosures about invasion of privacy by intelligence agencies of US and UK by monitoring emails, web searches, and telephone records. Is it impossible for them to monitor Nilekani? Or is the case that Nilekani is undertaking their task by collating biometric data of India. Admittedly, his masters have volunteered his services to other developing countries as well. President of World Bank did so in April 2013 at his headquarter in Washington.

In his book, Nilekani recalls that in 1935 “The British pass(ed) the Government of India Act, giving India its first step towards independence, creating a constitution and elected governments in the provinces. Indian leaders assert that the law does not go far enough. Nehru thunders, ‘The basic policy of this Congress is to combat the Government of India Act-the new Constitution- and destroy it!”

In 1950, the same Government of India Act, 1935 was adopted as the Constitution of India.

It is now evident that Indian National Congress is out to undertake the unfinished task of destroying the Constitution of India with the help of Nilekani who is acting as an agent of non-state actors. 

You may also want to read…

Why biometric identification of citizens must be resisted? Part I

Biometric identification is modern day enslavement -Part II

Biometric profiling, including DNA, is dehumanising -Part III

Marketing and advertising blitzkrieg of biometric techies and supporters -Part IV

History of technologies reveals it is their owners who are true beneficiaries -Part V

UID's promise of service delivery to poor hides IT, biometrics industry profits –Part VI

Technologies and technology companies are beyond regulation? -Part VII

Surveillance through biometrics-based Aadhaar –Part VIII

Narendra Modi biometrically profiled. What about Congress leaders?-Part IX

Aadhaar: Why opposition ruled states are playing partner for biometric UID? -Part X


(Gopal Krishna is member of Citizens Forum for Civil Liberties (CFCL), which is campaigning against surveillance technologies since 2010)

Ravi S
10 years ago
Subsidized Diesel: India spends a huge amount on petroleum subsidy alone, about Rs. One Trillion (Rs. One Lakh Crore). Diesel is highly subsidized. So should the general public pay for diesel-run private cars of rich people? There has been a lot of hue & cry on subsidy for kerosene and LPG, then why not on subsidized diesel for the rich people?
We should allow diesel subsidy only to some public transports and farming equipments (e.g. trucks, public buses, farm-tractors) with limits based on Aadhaar number of the owner on the lines of LPG subsidy.
Ravi S
10 years ago
Aadhaar status {verifiable with UIDAI website portal (dot) uidai (dot) gov (dot) in}
People registered: About 550 million (55.0 crore),
Aadhaar assigned: About 500 million (50.0 crore),
Population of India: 1250 million (125 crore or 1.25 billion),
Average Aadhaar rate: 30 million/ month,
Milestone planned: 600 million Aadhaar by March-2014 (easily achievable @ 1 million / day),
Remaining Enrollment of 650 million continues thru NPR (Ministry of Home Affairs - Census Operations - RGI) in illegal migrant infested states and populous states like UP, Bihar, J&K, W. Bengal, TN, Arunachal, Assam, Mizoram etc. Enrollment thru NPR is done only for Citizens after weeding
Ravi S
10 years ago
Opponents of Aadhaar believe that snooping / surveillance cannot be done without Aadhaar.

Then how Narendra Modi (CM of Gujarat) did the extensive snooping (every minute) of a girl in year-2009, not only on land but also in airplane i.e. before existence of Aadhaar? Intention of the powerful matters a lot!
Ravi S
10 years ago
Who is afraid of Aadhaar & Why?
As the public databases are getting inter-linked one by one thru Aadhaar Number in various States (particularly Delhi, Maharashtra, Andhra), we see the following effects:
1. Middlemen & Officials are finding difficult to continue with corruption in public welfare pensions, scholarships, public health, NREGA, subsidy on PDS Ration, Kerosene, LPG etc.
2. Ineligible, duplicate and fictitious beneficiaries are getting eliminated from public welfare pensions, scholarships, public health, NREGA, subsidy on PDS Ration, Kerosene, LPG etc.
3. Corrupts will find difficult to buy & sell Benami land & building (i.e.under fictitious name).
4. Corrupts will find difficult to open & operate Benami companies for money-laundering.
5. Corrupts will find difficult to open & operate Benami bank accounts for keeping black-money.
6. Tax-evaders will find difficult to evade taxes.
7. Impersonation & proxy will be difficult to commit.
8. Criminals & Terrorists will get detected and tracked thru inter-linked databases of mobile phone, bank account, travel documents etc.
9. Illegal Immigrants will get detected and tracked thru inter-linked databases of mobile phone, bank account, travel documents etc. They will have no place to hide on Indian soil.
10. It will get difficult for Criminals to hide as records are getting accessible to Police from any State of India.
11. It will get difficult to obtain another new Driving License and Arms License from another State once it got impounded.
12. Fraudsters will not be able to steal Provident Fund money.
13. Onion Hoarders will get tracked easily.
14. Dummy candidates will not be able to write competitive exams for others for the sake of money.
15. Ineligible people will not be able to misuse the certificates of income, domicile, education degrees and caste to deprive the eligible people.
Mumbai One
Replied to Ravi S comment 10 years ago
Looks like the PR of UIDAI is on a hit job.
Anyway...just give answers to two simple questions...
1. Who owns the UID database? Is it the Indian govt or private agencies/firms?
2. Which is the law that regulates the collection of biometric data, and Aadhaar itself? Don't hide behind the lapsed executive order as any such thing become irrelevant after six months.
10 years ago
The author tries to use disconnected facts selectively to malign Aadhaar Project. But an objective analysis will indicate that biometrics based identity prevents impersonation and indirectly empowers every citizen against identity theft.. Majority of the people have nothing to hide and welcome transparency. There is no doubt Aadhaar will also prevent leakages in service delivery to citizens. There is a small percent that thrives on impersonation, black money and corruption. They are certainly worried about cleansing power of Aadhaar.
10 years ago
Wow , the article looks well reasoned and researched. I certainly hope this is investigated and the motives of Nilekani clearly identified. If true it is time for Patriotic Indians to take stock of things.
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