Is UID anti-people?–Part 5: Why UID is impractical and flawed “Ab initio”

No scheme or subsidy can be free and open-ended. The facts hidden are that there would be some fees levied for each transaction that would be a burden on the citizens without option of retracing as it is already introduced. This is the fifth part of a nine-part series on the unique identification number scheme

Myth, false assumptions, illusions and imagination


While some of our friends more competent to talk on technical issues would deliberate on the subject with much more competence and alacrity, I would like a lay man (aam admi) seek to respond to the doubts in my mind.


The UIDAI has spun this as a “game changer” to tackle corruption that exists in reaching subsidy to the poor and the most deserving sections of our society. They are basically meant to handle pilferage and leakages in government schemes that are in vogue. (Remember Rajiv Gandhi stated that only 10 paisa of every rupee reaches the ultimate intended beneficiary!)


This is not meant for security or protection from illegal immigrants as many would like to presume including our most distinguished Members of Parliament (MPs) who believe and also support it for that purpose.


The socio-economic issue is to be handled through technology by collecting data, biometrics and iris. This is why it is so complicated that many are unable to understand and are even afraid of questioning an icon from the most successful information technology (IT) industry in the country—Nandan Nilekani. Incidentally many are unaware that Nilekani is a marketing man and would not know much about intricacies of information technology compared to those who have worked in IT as techies would know. However, his association with an IT major gives him an aura as if he were a technological genius. He could hardly be expected to know anything about biometric technology.


Such ignorance could be the reason for his faith that this technology could cure the ills of corruption in our welfare schemes. Behind the success of any venture it is the marketing that contributes to selling or packaging a product with a brand name. Therefore we grant him that in abundance. He has been just doing this with great success and aplomb.


Even a lay man would ask the question of where the data is going to be stored and the capacity to store this huge data base of over 1.21 billion citizens, not to include the 'residents' that are floating as also the increasing population on an ongoing basis. We are also eager to know on what platform this is going to be built. As the adage goes—it is wrong to put “all the eggs in one basket”. So multiple servers will have to be hired and therein lies another problem of security, safety of data and infringement. Well, the response is not satisfying and convincing. We have no official word on this.


Now for the provision of infrastructure assuming everything else from the IT is handled. We are reminded by MN Vidyashankar, former secretary E-governance of Karnataka that the biometric machines are of far superior quality and therefore can be relied upon. Though he promised to give details, perhaps he forgot with his pressing commitments, we presume.


Let us take the case of PDS, the elementary question is that there has to be a computer and a biometric, iris scan reader in each shop together with an internet connection that too in rural areas along with electricity to operate it. You also need internet connectivity in all the villages and towns.


What about electricity? Though power sector reforms were mooted way back in 2003 and unbundling of the electricity boards have taken place, yet no major investments are forthcoming and there is an acute shortage of power all round the country. Therefore on what basis are they going to provide the accessibility and operational issues that follow?


In most of the rural areas the power supply is just for 3-4 hours if not less and we are still struggling to meet the demand. So without addressing this in the first place how can they go for advanced technology: So the building is built without the foundation? How can it sustain?


Therefore it is only in some urban areas where this can be introduced but what is the use? Roughly 300 million access the net in cities on a rough estimate but they are all not beneficiaries of the welfare schemes as they are above the poverty line. Also they don't need any fresh identity as they have plenty of them that too more than one that the government recognizes.


Further all the equipments have to be sourced through proper procedure and these shops have to be equipped. How is it going to be done and by what time?


Remember when electronic voting was introduced, the major public undertaking Bharat Electronics (BEL) couldn't supply all the machines that were needed. It took lot of time to meet the demand. Now, there are doubts about these machines and their reliability and use in elections have been questioned in courts.


We haven’t even thought about the efficacy or the machine that can handle this efficiently because we are just collecting only the data that too not yet confirmed or duly verified (de-duplicated).


Why will the state government implement a scheme that entails political mileage to the central government? Has there been any consultation with the state chief ministers before introducing this concept. No. Hence this is going to fail at as several indicators to this effect are already out in the open.


So what is the budget? Where has this been reckoned? Sans answers.


All searching questions but sans proper answers


Yet another gas balloon without merit and floated on wrong assumptions...


“The UPA government’s ambitious unique identification number project Aadhaar, would result in savings of about Rs1.1 lakh crore by 2020, around 58% of the expenditure of major public welfare schemes, a Planning Commission study released on Saturday said. The Prime Minister's Office had given April 2014 as a deadline for disbursing cash transfer through UIDAI platform for all major government schemes.


A cost-benefit analysis done by National Institute of Public Finance and Policy (NIPFP) says the savings for the government would be by plugging the leakage in implementation of government welfare schemes.”


First of all the law is yet to be enacted and the UIDAI is operating with an executive sanction that has been questioned by the Parliamentary Standing committee as untenable and therefore cannot be continued.


Even as it is the mandate of the UIDAI is only for 600 million until 2014 and cannot be extended to 2020.


Therefore when the entire population is not covered how the study can consider such a proposition is itself awed. The UIDAI meeting the target set for 2014 is doubtful since there are several confusions within the government and the ministries as to who would be responsible for collecting the data. Whereas the home ministry has claimed that the National Population Register (NPR) would do this on its own. Hence the process has hit several roadblocks and may not completely achieve the desired target.


In the case of the health insurance scheme—Rashtriya Swasthya Bima Yojana (RSBY)—the central government has it seems decided to go for Smart Card. This is one of the schemes that the UIDAI has included in its objective. Financial services secretary DK Mittal has asked his officials to work out a convergence plan between financial inclusion initiatives and the RSBY smart cards. The RSBY needs an embedded smart chip with 32kb of memory which can be upgraded further. Banks just need around 20kb space for different services and it is very practical and feasible for them to adapt to the UID.


Some states have already adopted smart cards for various welfare schemes and the UIDAI is also aware about it.


Government recently introduced a slew of changes in LPG schemes and put a cap on the subsidy. This is a welfare scheme that UIDAI claimed from the initial stage as an objective to check pilferage. So this is drastically reduced without the UIDAI. Though checks and balances are already in place with accurate data by the oil companies that is already in place and working well.


Similarly, PDS is a state subject and several states have already introduced stern measures even without the UID and they seemed to be under control. Hence this too goes out of the ambit.


All that is left would be the MNREGS, which is also strongly contested by those working in the field as far from claims of UIDAI.


So the government is misleading the citizens by giving such false cures just to further its dubious design and nothing else.


“A full edged cost benefit analysis of the UID is hampered by two problems. First, many of the gains from it are difficult to quantify as they are intangible. A main benefit of the UID is that it can make many of the existing government programmes more demand-led, empowering the beneficiaries to hold programmes accountable for their entitlement,” said the study released by Planning Commission deputy chairperson Montek Singh Ahluwalia and UIDAI chairperson Nandan Nilekani.


Half truths and improbability are glaring in this statement. The huge cost on infrastructure and training which are necessary are not reckoned with the UIDAI. This is not only preposterous but cleverly packaged to hoodwink the masses. This is also clearly an escape route and a “red herring” to say later that they did caution in the beginning. Unless a comprehensive statement that includes all costs are clearly explained, these are mere “kite flying” and fictitious, imaginary claims that cannot be substantiated as benefits at all.


Eleven major government schemes—Public Distribution System (PDS), LPG and Fertilizer subsidy, Mahatma Gandhi National Rural Employment Guarantee (MGNREG) Scheme, pensions and scholarships cost the government around Rs2 lakh crore annually.


In PDS, once beneficiaries are enrolled within the system, it becomes easier for them to claim their benefits because they can authenticate their presence as beneficiaries. It also reduces leakages due to better matching of supply with demand, the Planning Commission study said.


PDS is administered by the state government. In a federal structure like India, when there is already a hue and cry of infringement into the domains of the state by the Centre, this scheme will have to be fully accepted by the ruling party.


State governments are already aware about the pilferage and also the concerns of the people and are already taking steps to address them. Huge amounts of money are also being spent by the state towards this hence it cannot be shelved or duplicated. The UID programme doesn't integrate but is a standalone programme that too thrust by the Centre, the states would prefer to go by their proprietary data and plans rather than accept some other that is untested and incomplete.


Till now state governments have never complained of ‘identity’ or the lack of it as a problem but determining the beneficiaries and targeted groups.


UID can never substitute the inspection, physical verification of applicants for issuing the ration cards to targeted groups such as AAY-BPL sections. Further the Centre has already devised the programme of Vigilance Committees and also Model Citizens Charter that go a long way to check corruption as it involves some guidelines and methods. Therefore UID is totally redundant to the scheme.


Most important is the fixing of the criteria and monitoring rather than identity. The Planning Commission is yet to arrive at a benchmark on poverty and they have already stirred a hornet's nest by floating some funny ideas that has still not seen the light of the day. Therefore on what basis can the figures be touted?


In the case of LPG, oil companies have devised scientific methods and stern measures including IVRS booking system that is fool-proof, further the LPG cylinders are delivered to the doorstep of the customer and hence clearly identifiable. UID in no way helps improve or make the scheme any better. Probably it will only complicate and confuse the mechanism as too many parameters may delay the process.


In Gujarat they are supplying gas through pipelines and no LPG cylinders are required hence on what basis can you say that there would be pilferage?


Other schemes are already working well and there is no need for another UID number to improve that too after spending huge amount of money.


“UID will make the migration experience in search of jobs easier by giving an identity to migrants in their destination locations. Similarly, rights and entitlements can be decoupled from the location of the resident,” the study said.


The study also said that Aadhaar-enabled system will reduce transaction costs involved in enrolling for a ration card in a new towns and villages, especially for migratory labour. “Such costs are expected to be driven down with a national identification mechanism and Aadhaar can play this role effectively,” it said.


This is clearly propaganda as no scheme or subsidy can be free and open-ended. The facts hidden are that there would be some fees levied for each transaction that would be a burden on the citizens without the option of retracing as it is already introduced. This is also indicated though in whispers otherwise administrative costs may go up to intangible heights defeating the very purpose of saving somewhere and loosing elsewhere.


Will the UIDAI give a guarantee that no such thing will be done in the future? Just like banks that allowed ATMs to be freely used and later on introduced a cap of five transactions not specifying what a ‘transaction’ means and now customers are bearing the brunt when they use debit cards for transactions! This is how they complicate the schemes on the gullible public.


(VK Somasekhar is active in civil society movements having distinguished in fighting for causes on environment, consumer movement and also civic issues. He is a triple graduate with post-graduation in Law as well as Diploma in Journalism, Diploma in Foreign Trade Management. He was also the president (vertical head) of a media entertainment company. He is also the managing trustee of Grahak Shakti, a voluntary Consumer Organisation of standing for over three decades now. A prolific freelance writer with accreditation by the state government and also appears on current issues on various news channels regularly both in vernacular and English media.)

Is UID anti-people?-Part 4: Does the implementation smack of corruption and negligence?
Is UID anti-people?-Part 3: Tall claims and tomfoolery of UID
Is UID anti-people? –Part 2: A bundle of contradictions, misconceptions & mirages
Is UID anti-people? The database state –Part1

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    Is UID anti-people?-Part 4: Does the implementation smack of corruption and negligence?

    Every year foodgrain worth thousands of crores rot due to lack of storage facility because the Indian government says there is no money. Where should the priority be—in spending whatever the little money available to build storage or embark on a fancy UID scheme? This is the fourth part of a nine-part series on the unique identification number scheme and its possible misuse by politicians, bureaucrats and foreign contractors

    The impudence

    It is inexplicable that sensible, highly qualified, experienced people would do things like this, especially when they are in responsible positions. Who in his (her) right mind would launch a project that encompasses the entire population of a nation, without careful investigation of the feasibility, pros and cons and without some study of costs and benefits? Even more incredible is that significant numbers of people, either out of fear, or faith in the government or the person heading it, with his media created image, have enrolled and still go for enrolment in the UID scheme.


    Perhaps, those who launched it did bet on the ignorance of the masses or their herd mentality or their helplessness against the power of government. If so, they have a diabolical game plan. It cannot be that they did not know what the project entails or what it would achieve. The media too has played along. This is as expected.


    When dictatorial leaders rise, either in a coup or metamorphose from democratic processes, as when Hitler or Mussolini, or Stalin, or Nasser or Sukarno and many others strode across their nations and the world, the media and the public acquiesced. The people who launched the UID scheme are thought to be good men. As the judge who sentenced Rajat Gupta said, "Good men do bad things". The manner in which the UID scheme was launched and is promoted now, is characterised by impudence, call it a kind of foolhardiness, if you will. They pretend that it is for giving people an identity.


    They project it as a tool that would reduce corruption in welfare service delivery. Yet they are all in a government which has been rocked by one scandal after another over its entire second tenure. While they make these claims, they do not say how the goal would be achieved.


    Did they look at alternatives? If, as is admitted, they did no study of the UID project, how could they have investigated alternatives?


    For the past several decades, thousands of crores of rupees worth of foodgrain rots due to lack of storage. Government spokespersons say that there is no money. Where should the priority be in spending the little money available—to build storage or embark on a fancy scheme spending these crores?


    Is the promotion of UID deceitful?

    UID is promoted as a noble pro-poor program. The National Population Register (prepared under the amended Citizenship Act), on the other hand, is supposed to identify and counter illegal immigrants and prevent such immigration. Whether NPR would succeed in achieving its objectives is a moot question. A government decision resulted in sharing the work of capturing the data of the population on a 50-50 basis. UID is for all residents. NPR is only for citizens. This exposes the incongruity of the decision. NPR does not provide for capturing biometric data. It does not also have any provision for sharing the data with other agencies such as banks, insurance companies and so forth, whereas UID is promoting the sharing of data for all kinds of applications. The finance ministry questioned the duplication of work and waste of money with multiple agencies doing the same work. This led to the sharing of population decision. There is confusion on registering twice, once in NPR and again in UID.


    One of UIDAI's foreign contractors is a US firm, L1 ID Solutions (L1). It is now a subsidiary of Safran, a company in France. It is now called Morpho Trust. It still has an address and operations in the US. L1 provides a host of intelligence services to US intelligence agencies, Defence Department and for commercial organisations. The services, which L1 provides are given in the annexure to the Monograph.


    UIDAI has refused to disclose details of the contract with L1 in replies to RTI queries. An appeal has been led with the CIC. The refusal to furnish contract details gives rise to the suspicion that the UIDAI has something to hide and in all probability, L1 is providing intelligence services to the government, the disclosure of which, would take the lid of the fig leaf of UID being a pro-poor initiative. More about L1 and its background is given in another article in this series.


    RTI queries to the UIDAI raise many questions and leads to misgivings and apprehensions of corruption and a cavalier approach to capturing, processing and handling sensitive data of people of the country. UID has a system of private firms UIDAI empanelled for field work of data-capture. Initially, the UIDAI website gave a list of 209 such companies. The empanelment seems to have been done in a lackadaisical way.


    Among the empanelled firms are a tea estate, a printing press, a NGO in education, stock brokers, etc. Three of the empanelled firms have the same addresses and appear to be from the same family. The UIDAI also has registrars. The registrars are government departments, banks and public sector organisations such as insurance companies. The registrars are to contract out the field work of data-capture to the empanelled agencies (EAs). There are many instances of corruption, fraud and termination for such activities. With difficulty it was possible to obtain information on the criminal cases led against the EAs who indulged in fraud.


    Although years have passed, nothing further is known about the progress of the cases. More importantly, the question of what is to be done with the data these firms captured prior to their termination and criminal cases is not answered. UIDAI and government registrars do not seem to be bothered about such trivialities. They are evasive regarding the responsibility towards data security. UIDAI says that they only empanel the EAs and have no further responsibility.


    An RTI reply from the UIDAI, Bangalore giving details of a FIR filed in a police station with allegations of fraud in enrolments is placed in the annexure. A firm, Global ID Solutions, acting as a franchisee of Alankit Fin Sec is alleged to have issued fake ID cards with the UIDAI logo. The case was led 29 July 2011, even though the RTI reply states that information of the fraud was received on 29 June 2011. A newspaper advertisement in a Tamil daily on 2 November 2011 stated that the advertiser would issue national ID cards in seven districts of Tamil Nadu. A FIR was filed in Dharmapuri police station. A scanned copy of the RTI reply is in the annexure.


    Alankit Fin Sec is one of three firms, which appear to have some relationship with each other. UIDAI says that this firm has not been re-empanelled.


    Over a year has passed. Nothing is known about how the fraud was committed, who were the persons behind it, how many people have these false IDs, were their biometrics uploaded on to the UIDAI servers, etc. If these are just two frauds that were detected, how many might have gone undetected? Such frauds have been reported across the country. Neither the UIDAI nor the government seem to be bothered.


    UIDAI's other foreign contractors

    One of UIDAI's foreign contractors is Accenture Plc. The company has a history. The information given here is garnered from the Internet. The truth of the information could only be established through a proper investigation. The information is such as to warrant such investigation before the Government of India or the UIDAI enter into business dealings with the company. However, this does not seem to have been done. Even worse, UIDAI in a RTI reply, stated that they do not know the country of origin of its foreign contractors.


    Accenture's partners were the same as those of Anderson Consulting. The partners split from Arthur Anderson shortly before it went into liquidation following the Enron scandal, whose auditors they were.


    According to Wikipedia, in October 2002, the US Congressional General Accounting Office identified Accenture as incorporated in a tax haven country. Accenture was incorporated in Bermuda. In May 2009, Accenture changed its place of incorporation to Ireland. It then became Accenture Plc. Accenture is a prime contractor to US Defence Services. Accenture has been embroiled in several cases under US Laws of "The False Claims Act", "the Anti-kickbacks Act" and the "Truth in Negotiations Act".


    According to a US Department of Justice release of 12 September 2011, Accenture paid $63.675 million to settle False Claims Act allegations. The laws under which Accenture was proceeded against in the US would constitute offenses under the Prevention of Corruption Act and would entail criminal liability in India. The website details from where the data about the company were gathered are in the annexure to this monograph.


    Impudence, Imprudence, Corruption or Negligence

    Impudence is characterised by offensive boldness; insolent or impertinent behaviour. Imprudence on the other hand denotes indiscretion or lack of wisdom, perhaps even common sense. The nonchalance of UIDAI and the Government in the face of such information about their contractors in so important a project that affects the entire population and costs several thousands or lakhs of crores of rupees is astounding. They dismiss any criticism with utter disdain.


    The media, which has such information, is in a "Maun Virat" mode. There is a conspiracy of silence. What due diligence did the UIDAI do before appointing these contractors? The answer would be "None whatsoever," if the RTI reply stating that there is no way of knowing the origin of the contractor companies is to be believed.


    The UIDAI chief being an IT honcho could not be unaware of the past history of Accenture. It is difficult to believe that the RTI reply was given by a junior official without knowledge or permission from higher-ups in the UIDAI hierarchy. Is this deliberate deceit? Deceit is always deliberate. It is neither accidental nor innocent. Could the denial of information regarding the contracts and contractors be induced by corruption or could it be sheer negligence. Only an impartial investigation would reveal the truth.


    Meanwhile the nation and its people would have to stoically suffer the impudence and imprudence of those in authority.


    (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 3: Tall claims and tomfoolery of UID
    Is UID anti-people? –Part 2: A bundle of contradictions, misconceptions & mirages
    Is UID anti-people? The database state –Part1

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    Is UID anti-people?-Part 3: Tall claims and tomfoolery of UID

    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


    Tall Claims
    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.
    Ground realities

    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 ). 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


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    P M Ravindran

    7 years ago

    I am not going to comment on UID but on the efforts I had to make to land on this page. I landed on the 9th part of this series first. It had links to the rest 8 and I could land on all 7 except this by just clicking on those links. Now curiosity took over. And copied the URLs of all those available links and studied the changes and learnt that what mattered, apart from the text, was the last 5 digit figure. Went back to the competitive exam days of the 1970s and worked it out successfully! In the bargain I also learnt that it is this figure that matters most. With same text but different figures I landed on a few reports which of course had no relation to the text in the url!

    Krishnaswami CVR

    7 years ago

    The article appears to be biased and highlighting hardships. Even though it talks about privacy, it does not highlight that privacy of details is highest danger in this scheme. The comments on the cash deposits and withdrawal is an indication that the author does not look into the matter dispassionately, but with biased mind. I stopped reading after the said lines. The lines are an indication of wordplay which the article alleges on the part of the government. Is it illegal to deposit cash in excess of Rs.20K? The article alleges so. I request the author to quote me the relevant law. My bankers accept cash in excess of Rs.50k in my account with the condition that i indicate my pan number in the voucher of deposit. They never told me it is illegal. Is it illegal to pay more than Rs.20K ? I am paying rent in excess of 20K and i get a cash reeipt? is it illegal. Dear author build arguments based on fact and not otherwise.

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