In your interest.
Online Personal Finance Magazine
No beating about the bush.
Neither LPG nor any other subsidy leakage would be reduced though the use of UID. All that would happen is untold misery for the subsidy recipient. This is the third part of a nine-part series on the unique identification number scheme and its possible misuse by politicians, bureaucrats and foreign contractors
It is not possible to deal with all the welfare schemes here for which these tall claims are made. Hence, only the claims about reduction in LPG subsidy leakages are discussed here, as typical of other similar claims. Tomfoolery means absurdity. The adjective aptly describes the UID scheme. UID is a scheme that involves a lot of scheming and schemers. The "Tomfoolery Show" is an American cartoon comedy television series. A really funny and popular, oft-repeated scene in this comic is of a delivery boy running around trying to deliver a large plant shouting, "Plant for Mrs Discobolus". One could find it quite funny to imagine a LPG delivery boy running around shouting, "Subsidised LPG cylinder for Mrs Aadhaary; family line up for fingerprint authentication" in the real-life UID comedy show. Comedy shows provide comic relief.
Unfortunately, while the UID scheme's objectives are laughable, they cannot be laughed off, since, before the scheme collapses under the weight of its own contradictions and falsehoods, it would have brought untold damage to the nation's social fabric and compromised personal security of millions of Indians.
The Unique Identification Authority of India (UIDAI) chairperson made several tall claims about the UID scheme's potential to reduce subsidy leakages, in talks to media many times. Thus, he reportedly said that LPG subsidy leakages could be reduced by Rs12,000 crore using UID. He has never specified how this could be done. He hinted at authenticating the buyer/customer of the LPG cylinder. He did not mention when the authentication would be done. He headed a task-force on subsidies. The task-force submitted an interim report. A ministerial panel approved and accepted the report. The report recommends the use of UID for authenticating recipients of welfare subsidies. What else could one expect when the task-force is headed by the person who is spear-heading the UID project? This is like asking the accountant to check the veracity of the accounts he has prepared. More crudely, one could say, it is like asking the thief or the one who created a problem to suggest measures to prevent theft or prevent recurrence of the problem.
It reminds one, of Edgar Wallace's novel, "The Joker". In the novel, a rich man gifts a jail to the city where he lives. Later he is caught for fraud and jailed in the same jail he had gifted. He had made a tunnel from the jail to the outside, when he had it constructed. He escaped through the tunnel, playing a clever joke on the city. Enough escape hatches have been built into the UID scheme for those who are indulging in this colossal waste of public money to deny responsibility when it fails, as it is bound to.
A few of the task-force's recommendations on LPG
The biometric authentication 'tamasha' is the fulcrum on which rests the assumption that subsidies could be prevented using UID. Let's look at how ridiculous this assumption and the task-force's recommendations are in just one welfare subsidy scheme-LPG. Here are a few of the recommendations...
1. Details pertaining to customers availing subsidised LPG would be published on the transparency portal of the oil company.
2. Call centres would be established to address customer complaints.
3. Distributors would be compensated for additional working capital they would need to stock non-subsidised LPG cylinders. (No one knows how much the compensation would be and how it would be paid. The task force does not deal with such trivialities.)
4. "Aadhaar numbers of all members of households would be seeded against customer data". (Such phrases intended to confuse abound in the task-force report. Why use words, like, 'seeded'? It probably means that since each LPG connection has one name on it, the names and UID numbers and biometrics of all members of his/ her family would be captured and stored in the UID and perhaps, oil company database. Imagine the problem when a member of the family would have if he/ she moves out and lives separately.)
5. The bank account numbers will also be collected and seeded! (Thus, if one wants to obtain a subsidised LPG connection, the bank accounts of all members of the family and their biometrics would have to be given to UIDAI.)
6. "De-duplication on Aadhaar to eliminate ghost connections will be done. Application software will be developed; (What will be the cost of development of this software?) hardware will be fully compatible with UIDAI standards. (What will be the hardware cost? Who all will need both the software and hardware-the oil companies, government civil supplies departments, dealers, etc?)
7. Subsidised LPG cylinders will be provided only to targeted/segmented customers. The process of identifying will be notified by government. (The Standing Committee on Petroleum and Natural Gas has recommended that subsidised LPG be given only to those with annual income less than Rs6 lakh per annum. I had written to the Parliament Standing Committee on Finance, which examined the National Identification Authority of India (NIA) Bill informing them that the frauds in welfare schemes are in decisions on eligibility and not caused by identity problems. The Parliament Committee accepted the same and wrote it into their report. So, how and who would identify those with less than Rs6 lakh annual income? Would your fingerprints reveal your annual income? What happens when one loses a job, receives a promotion, changes jobs, etc?)
The task-force then says that pilot projects to test whether their method would work would be undertaken in two districts in Hyderabad and Mysore. Conflicting reports have appeared in the press on these pilots. Some said that oil companies have rejected the method. Another press report said that the ministries of finance and petroleum and oil company executives accepted the method. I sent RTI queries to oil companies. They replied stating that the pilot trials are incomplete. The ministry of finance denied any knowledge of it. Replies from other, including UIDAI have not been received. The RTI replies are placed in appendices to this monograph.
Let's see how the recommendations would work on ground. It is incredible that such a scheme would be launched with imaginary uses and halfway through its implementation, the promoters would be running pilot studies to test its feasibility. Is this how a responsible government and a former business magnate are expected to launch projects?
The logic of "authentication at delivery using UID numbers" proposed by the task-force is baffling. Are the intelligent people that staff the task-force not aware that it would be a simple matter to check diversions of domestic cylinders for commercial use? Cylinders of different colours are used for domestic and commercial purposes. The oil company delivers cylinders at the location of the customer. Does the task-force think that domestic customers then sell the cylinders to commercial enterprises? If, as the task force seem to say, large-scale diversions of subsidised LPG cylinders take place, are they suggesting that large number of people of this country are thieves? Do they not know that it is impossible to divert LPG cylinders without the connivance of the oil companies, their distributors and the civil supplies department officials?
Recently, it was reported that a chief minister of a state had surrendered three of the four LPG connections he had. How many politicians and bureaucrats have more than one connection? During the 2G scam, it was reported that a former Central Government minister for telecommunications had a BSNL telephone exchange installed for his personal use with over 300 lines. Whatever happened to that revelation? The purpose of the analogy is to show that it is not the people who are misusing facilities, but those in authority.
Why not use the customer number to detect diversion? Why another number, such as UID?
Reverting back to the LPG issue, every customer has a number given by the oil company for his/her connection. Oil companies and their agents have databases with the number of cylinders consumed every month by each customer. Everyone knows that an average family would consume a cylinder in about a month and a half. If a customer is found consuming say several cylinders a month, is it not possible to check on such customers to detect diversions or commercial use?
Recently, Karnataka government asked all LPG customers to provide their electric meter numbers to check if more than one connection exists in a household. This was an equally foolish exercise. A defence department layout had just one meter for 200 houses!
Instead of looking at where the diversion and mischief is taking place, the task force, driven by the UIDAI chief are barking up the wrong tree, trying to fix a small leak in the dyke, when part of the dyke wall has caved in.
Now look at the problems associated with authentication at delivery. The person in whose name the gas connection exists would have to be present at the time of delivery to authenticate him/her. To get round this stupidity, UIDAI has recommended linking the biometrics of all members of the family and their bank accounts with the LPG connection. Are they not able to visualize situations where no family member would be present, as when all of them would be working or at school/college and servant or neighbour collects the delivery?
To authenticate at delivery, every sales truck would have to carry a scanning device. Are these delivery staffs capable of handling such devices with the care they need? What would happen if, for whatever reason, lack of connectivity or malfunction of the device, the authentication fails? How many undelivered cylinders are oil companies and their distributors willing to accept? How many trips are they willing to accept for such failed deliveries? Imagine the hardship the family would have to go through in such situations. What is the cost of all this? Has the cost of scanners for every truck, the cost of spare scanners, their maintenance cost, the training cost for delivery personnel and so on been accounted for? Why are UIDAI and the government persisting with this foolishness in attempting to find uses for UID?
Authentication in other welfare schemes
The task-force has recommended that every retail fertiliser shop be equipped with scanners. They say that there 2.3 lakh retail fertiliser shops (Paragraph 7.2.1 page 40 Task-Force interim report). There are over 5 lakh ration shops, as on 30 Jun 2011. PIB news release. All these shops would have to be equipped and the shop owners and staff trained in handling scanning devices. Only a fool would think that this is feasible. Almost all countries in the world subsidize goods and service to their people. How many of them have indulged in such stupidity?
Take USA for example. How do they authenticate farmers who are given the subsidies? Our government and the UIDAI chairperson are ardent followers of the US economic system. In the US, $277.3 billion was distributed as subsidies to agri-businesses, between 1995 and 2011. Of this, the top 10% collected 75% of all subsidies, amounting to $172.2 billion. The rich farmer received $31,400 per year. The poor farmer at the bottom 80% got $594 per year. (Please see EWG Farm Subsidies website for details http://farm.ewg.org/region.php?fips=00000 ). This is what targeted cash transfers could do. Perhaps, this indeed is the purpose, to be able to send the subsidies to those whom the government in power wishes to favour.
Cash transfers and changing power equation
Once UID is in place, as far as welfare schemes are concerned, power will shift to the party in power at the Centre. Even though the parties in governments in the states may decide on who receives subsidies by identification of eligible persons, the control of distribution of the subsidies would be in the hands of the Central Government, since the authentication process is controlled by the UIDAI, which is a central authority. This would be especially true of centrally funded welfare schemes. For example, a village or electoral constituency that has not voted for the Central Government party could be discriminated against and subsidies denied on various pretexts.
A World Bank report points to the cash transfers in Columbia wherein the people tended to vote for the party in power perceiving them as the giver of the largesse.
Secondly, it is easier to swipe cash than goods. For example, for a customer to sell a LPG cylinder in black market or for an agent to divert a number of cylinders for commercial use is more difficult than to siphon off cash transferred to banks accounts.
LPG cash subsidy could be transferred to non-eligible people, if eligibility criteria are stipulated, or people with fake IDs. It is possible to fake fingerprints with a cost as little as Rs30. This was demonstrated to an E-governance secretary of a state government. Today, LPG subsidy is universal. Hence, there is no need to fake eligibility.
Thirdly, it would be much easier to divert the cash subsidy, even by eligible persons, since the subsidised cylinder need not be delivered at all, but instead, only authentication of the buyers done as if it has been delivered. To illustrate, assume that the LPG subsidy policy is that a household with income below Rs6 lakh per annum is eligible for six subsidised cylinders. Firstly, there is no way an oil company or government could verify the income of the household or the person in whose name the LPG connection is taken. Persons and households could fall into and come out of such income brackets. The 'eligible' household could merely be shown as having bought the cylinders, without taking delivery of the cylinders. The oil company's dealer merely obtains the scanned biometric to show the purchase. The cash is received by the household in the bank and cash given to the delivery boy/dealer in a mutually agreed sharing pattern. The cylinder is sent for commercial use where the subsidised cost is collected for payment to the oil company.
The moral of the story is that any system is only as good as the people who manage it. For example, there are laws against depositing and withdrawing cash and paying in cash beyond the stipulated sums (Rs50,000 for deposits and Rs20,000 for payments).
Akilesh Yadav, current UP CM deposited Rs44.67 lakhs in cash and paid the same amount through cash to a government department (Nazul department), as per media reports. Akilesh said that he received the sum as loan from his party. The I-T Appellate Tribunal ruled that there was no scope for introducing any black money for transfer of cash from one concern to another concern and that the genuineness of the transaction was beyond doubt. In a country where such rulings happen, how could UID hope to stop diversion of subsidies?
India's welfare schemes under foreign company control
Lastly, one should note that it is not the UIDAI that authenticates the person receiving the subsidy cash transfer, but a private foreign company and its official who manages the biometric database of all Indian residents. Thus, the social welfare system of the Nation would be run at the whims and fancies of private foreign companies.
Who would be legally responsible for fraud or failure to authenticate or false authentication? Would the UIDAI or the foreign company be responsible? While the matter is being decided, how would the person who did not receive the LPG cylinder cook his/her food? Is it possible for the foreign company to either create discontent or discredit a government deliberately make large-scale errors?
One could argue that it is unlikely that the foreign firms would not have any interest in who receives the subsidies. That could be true, though not necessarily so. They could have other motivations. The foreign company could be influenced or could on its own decide to sabotage the system. No nation would be idiotic enough to have its entire demographic database and welfare systems in the hands of private foreign companies, but the UIDAI seems to be doing exactly that. The UIDAI and the task-force on subsidies headed by its chairperson have been careful to hide this fact by showing the authentication in flow diagrams in its report as being done by UIDAI. At the same time the UIDAI has refused to disclose the contracts with these foreign companies.
Neither LPG nor any other subsidy leakage would be reduced though use of UID. All that would happen is untold misery for the subsidy recipient. It is high time the people of this nation realise the charade played on them and stop it.
(Col (Retd.) Mathew Thomas is a former defence services officer and missile scientist turned civic activist, campaigning against state database control of the people.)
Is UID anti-people? –Part 2: A bundle of contradictions, misconceptions & mirages
Is UID anti-people? The database state –Part1
Government pursuing UID discreetly without answering Parliament or doubts of citizens is leading to the fear that apart from sacrificing the interests of citizens, this humungous scandal when exposed and revealed will have dangerous consequences and unrest amongst people. The plight of those who have given their biometrics and iris to unknown persons will be haunting them forever. This is the second part of a nine-part series on the unique identification number scheme
Attaching numbers to people, digitizing their data, and storing these in databases is the modern IT way of branding people, so that those who ‘misbehave’ could be tracked and tackled. This is the first part of a nine-part series on the unique identification number scheme and its possible misuse by politicians, bureaucrats and foreign contractors
Intolerance of criticism or politicians’ fear of loss of office results in their need to control people. They imagine, with some justification, that IT would enable them to do so. With advances in technologies, such as biometrics, they like to, and are led to believe that it is possible to control people using these technology tools. Thus, a popular misconception is that fingerprints and other biometrics would uniquely identify a person. This is far from true.
“The Economist” of 1 October 2010, said, "THANKS to gangster movies, cop shows and spy thrillers, people have come to think of fingerprints and other biometric means of identifying evildoers as being completely foolproof. In reality, they are not and never have been, and few engineers who design such screening tools have ever claimed them to be so. Yet the myth has persisted among the public at large and officialdom in particular. In the process, it has led— especially since the terrorist attacks of 11 September 2001—to a great deal of public money being squandered and worse, to the fostering of a sense of security that is largely misplaced.”
It is difficult to manipulate people. Numbers are easily manipulated. IT facilitates number crunching. Hence, the logic of systems intended to manipulate people, so that they adhere to certain behaviours acceptable to rulers (politicians, bureaucrats and some business persons), is to attach numbers to people. In the ancient world, the Romans and others branded slaves. Attaching numbers to people, digitizing their data, and storing these in databases is the modern IT way of branding people, so that those who ‘misbehave’ could be tracked and tackled.
Such attempts are packaged as meant for other purposes. For example, Bush in the US passed the “Real ID Act, 2005” to incorporate biometrics in driving licenses. Blair, in UK, brought the “National ID Card Act” also in 2005. These were promoted as ways to control illegal immigration. Bush’s Act has been given a quiet burial and Blair’s scrapped.
In scrapping the Blair Act, home secretary, Theresa May, called it, “The worst of government, intrusive bullying, and an assault on personal liberties.” She added, “We propose to do government business as servants of the people, not their masters”.
Our politicians seem to think that they are rulers. They have come out with the Indian version of their people-manipulation tool. It is called ‘UID’, Unique Identification. Shedding crocodile tears, they say that it is for giving an ID to those who do not have an ID. The deceit is immediately exposed, in the UID enrolment form itself.
The Form accepts 14 other identities, like ration cards, driving licenses, PAN cards, etc. Is it not silly that no one calls this bluff? The Unique Identification Authority of India (UIDAI) claims that the ID it provides is, “a unique identification number that can be verified and authenticated in an online, cost-effective manner, which is robust enough to eliminate duplicate and fake identities.”
Giving IDs or taking them?
The UIDAI is not providing anyone, let alone those who do not have it, an identity, but it is giving each one of us a “UNIQUE IDENTIFICATION NUMBER”. Instead of giving us IDs, it is taking our existing Ids—passports, driving licenses, PAN cards, ration cards, etc—linking these to a number and giving each of us a NUMBER. We, the people, cannot identify ourselves or prove our ID to anyone. To prove one’s ID, the database has to be queried. The database is controlled by the UIDAI and its foreign contractors carry out the authentication of the ID. Hence, UIDAI and its foreign contractors control our ID.
This is why Prof Ian Angell, head of Informatics at the London School of Economics, called such central databases under government control, “The Ultimate Identity Theft”, in an article to “Times Online”. So, everyone is numbered, like the branding of Roman slaves. This subterfuge is lost on almost all people. Most people labour under the misconception that they would have a “portable ID”, which they could use to prove who they are - a convenient personal asset.
Every ID we have, be it a driving license, PAN card or passport are all ‘Portable’. Anywhere in India, these are accepted as proof of our ID. Our passports are accepted across the world. UIDAI's claim that ration cards are portable IDs and that those holding these UID number-linked ration cards could draw their rations anywhere is a lie. Even cash transfers, instead of rations, would not be possible when the ration card holder moves from one ration shop and state to which he/she is attached to another location.
To repeat what was said above, for clarity and emphasis; people are not given an ID, but a number. The number is in a database. To establish one’s ID, the database has to be queried. Who controls the database? Obviously, it is not you. It is the government, meaning some politician, bureaucrat or company official who manages the database. In this case, the ultimate control rests with the foreign private company contractor of UIDAI who provides the biometric technology and authenticates IDs using it.
A brand name for branding people
The second deceit in the UID scheme is its promotion as a tool that would prevent welfare subsidy leakages, enable access to government services and make service delivery efficient. To promote this falsehood, UIDAI has given the UID scheme a brand name, ‘Aadhaar’. The brand name is deliberately not used even once in this article. Would it not be stupid of people to promote the brand name of an evil scheme intended to manipulate them? It is mentioned here to bring out the extent of deception being perpetrated on innocent people. Again, most people are taken in by such gimmicks.
The database of all people, residing in India, with a unique number allocated to each person, is to be linked to their bank accounts, tax numbers, LPG consumer numbers, ration cards, insurance, health records, pension records and so forth. This is database state control at its worst. It reminds one of the ID cards for Indian indentured labour in apartheid South Africa and the list of Jews in Hitler’s Germany.
The deceitful way in which the UID is promoted is diabolical. UIDAI claims that it is voluntary. Simultaneously, the UIDAI says, “Service-providers could ask for it”. Next, news is put out regularly in media, stating that the UID is being ‘linked’ to LPG, MGNREGS, KYC of banks, and so on. The gullible and the timid, not wanting to be left out of government's largesse rush to enrol in UID.
Finding allies for tall claims
Tall claims of huge savings in subsidy leakages are made through the media. Initially, the UIDAI made these claims. Now it has allies doing it for the Authority. NIPFP in a recent “research study” claimed savings of Rs1.10 lakh crore in subsidy leakages by 2018. A safe bet indeed. Who would remember this, six years from now? It is astounding how a hitherto reputed organisation has fallen for this ploy and sought to justify it with some arithmetic. The so called research is based on government data and the UIDAI's claims.
The NIPFP research avoids mentioning how the UID would be applied in the field to any of these schemes. News had been leaked that "proof of concept" (PoC) studies for LPG and BPL rations were being done. On the LPG PoC, RTI queries receive responses stating that the studies are incomplete, but some news reports hint that the studies are successful. The UID is perhaps, the only project in the world in which PoC studies are undertaken well after the project is underway.
While the UIDAI claims to be transparent and media extols the virtue, RTI replies prove attempts to hide information. To illustrate, in Appendix 1 to this Monograph, are RTI applications seeking copies of UIDAI's contracts with foreign companies and their replies. The UIDAI has refused to provide copies of the contracts. In a first reply, the UIDAI said that it has signed “Non-disclosure agreements” with the contractors. In another reply, the UIDAI cited Section 8(1)(d) of the RTI Act, which says that information such as trade secrets, or intellectual property, which would compromise the competitive position of third parties need not be disclosed, unless it is in public interest to do so.
It was pointed out that since the contracts have already been awarded and the competitive position of the contractor companies would not be compromised. Further, the proviso to the exception under Section 8(1)(d) of the RTI Act, states that information that cannot be denied to Parliament or a state legislature cannot be denied to the public.
In spite of quoting the above proviso in the appeal against refusal, the UIDAI appellate authority has upheld the PIO’s refusal to furnish the information. The RTI applicant has appealed to the CIC. The First appeal also stated that since the expenditure for the contract payments are from the public exchequer, the public is entitled to know the terms of the contract. This too did not impress the UIDAI’s appellate authority.
What has the UIDAI got to hide in these contracts? Everything. These contracts would reveal all. This leads to the question posed on the front cover. Very, very few people know or realize that to be identified as an Indian, a foreign, private company would have to verify and certify that the biometric images stored in their database matches that of the person being identified. Could anything be more insulting to us? The danger to our nation’s security posed by such database control in the hands of foreign private companies is the subject of another article in the monograph.
(Col (Retd.) Mathew Thomas is a former defence services officer and missile scientist turned civic activist, campaigning against state database control of the people.)