Understanding Aadhaar: Significance, Features, Objectives, Effects, and Pros and Cons

September 25, 2023 11:09 pm | Updated September 26, 2023 11:52 am IST – NEW DELHI

Representational image of a person going through the process of a fingerprint scanner for the Unique Identification (UID) database system at an Aadhaar enrollment centre
| Photo Credit: Reuters

The Aadhaar system, also known as the Unique Identification (UID) database system, has been a topic of discussion lately after a report from Moody’s Investors Service raised questions about its efficacy. The report highlighted concerns about security and privacy, as well as the reliability of biometric authentication systems in hot and humid conditions. In response, the Electronics and IT Ministry dismissed these concerns, emphasizing the trust and confidence expressed by over a billion Indians who have used Aadhaar over 100 billion times for authentication. Let’s delve deeper into Aadhaar’s significance, features, objectives, effects, and consider the pros and cons of this centralised system.

Significance of Aadhaar

Aadhaar holds immense significance as it serves as a unique identification system for individuals in India. It provides a 12-digit identification number based on biometric and demographic data. Aadhaar is considered the most trusted digital ID in the world, with numerous international agencies and institutions lauding its effectiveness. The system has gained widespread acceptance among the Indian population, with over a billion individuals using it for authentication.

Features of Aadhaar

Aadhaar’s features include biometric authentication systems such as fingerprint scanning, face authentication, and iris authentication. Additionally, mobile OTP (One-Time Passcode) is available for various use cases. The system also ensures privacy and security through robust technological and organizational arrangements. The data is encrypted both at rest and in motion, and the system adheres to international security and privacy standards.

Objectives of Aadhaar

The main objectives of Aadhaar are:

1. To establish a unique identification system for individuals in India.
2. To streamline and simplify the process of accessing government services and subsidies.
3. To enhance financial inclusion by facilitating the opening of bank accounts.
4. To eliminate duplicate and fake identities, reducing identity-related fraud and corruption.
5. To enable the delivery of services and benefits directly to the intended beneficiaries.

Effects of Aadhaar

Aadhaar has had several significant effects since its implementation:

• Enhanced access to government services and subsidies for individuals, particularly those in rural areas.
• Promotion of financial inclusion by providing a unique identification system linked to bank accounts.
• Reduction in identity-related fraud and corruption.
• Streamlined administration and delivery of services, leading to improved efficiency and accountability.

Pros and Cons of Aadhaar

As with any system, Aadhaar has its share of pros and cons:

Pros:

1. Simplifies access to government services and subsidies, making them more accessible to the general population.
2. Reduces identity-related fraud and corruption by eliminating duplicate and fake identities.
3. Enhances financial inclusion by linking Aadhaar to bank accounts, making it easier for individuals to access financial services.
4. Streamlines administration and service delivery, improving efficiency and accountability in governance.

Cons:

1. Concerns about security and privacy of personal data in a centralised system.
2. Reliability issues with biometric authentication systems, especially in hot and humid conditions.

Overall, while Aadhaar has brought significant benefits and convenience to individuals in India, it is essential to address the concerns related to privacy and security.

Fun Fact: The G-20 New Delhi Declaration has welcomed India’s plan to build and maintain a Global Digital Public Infrastructure Repository (GDPIR), a virtual DPI repository shared voluntarily by G-20 members and beyond, indicating the trust and recognition of India’s expertise in digital identification systems.

Mutiple Choice Questions

1. What is the title of the note issued by the Electronics and IT Ministry?
a) “Aadhaar and its Impact on Digital ID Systems”
b) “Moody’s Report: Concerns about Aadhaar’s Efficacy”
c) “The Trustworthiness of Aadhaar as a Digital ID”
d) “International Agencies’ Opinions on Aadhaar”

Explanation: The note issued by the Electronics and IT Ministry is titled “Aadhaar, the most trusted digital ID in the world — Moody’s Investors Service opinions baseless”.

2. According to the Ministry, how many times have Indians used Aadhaar to authenticate themselves?
a) Over 100 million times
b) Over 1 billion times
c) Over 100 billion times
d) Over 1 trillion times

Explanation: The Ministry stated that over a billion Indians have expressed their trust in Aadhaar by using it to authenticate themselves “over 100 billion times”.

3. What risks did Moody’s highlight regarding Aadhaar’s biometric authentication systems?
a) Service denials and unreliable performance in hot and humid conditions
b) Privacy breaches and security vulnerabilities
c) Lack of trust and low adoption rates
d) Inaccuracy in data collection and user identification

Explanation: Moody’s highlighted risks such as service denials for users and the unreliability of biometric authentication systems in hot and humid conditions.

4. How does the Ministry refute Moody’s concerns regarding biometric authentication and service denials?
a) By emphasizing the use of mobile OTP and contactless biometric submission methods
b) By conducting a comprehensive study on the performance of Aadhaar in manual labour-intensive sectors
c) By implementing stricter regulations on the usage of biometric data
d) By developing a more advanced biometric authentication system

Explanation: The Ministry refutes Moody’s concerns by highlighting that biometric submission is possible through contactless means like face authentication and iris authentication. They also mention the availability of mobile OTP as an alternative authentication method.

5. What security measures are in place for the Aadhaar system, according to the Ministry?
a) Encryption of data and compliance with international security and privacy standards
b) Regular system audits and vulnerability assessments
c) Use of AI and machine learning algorithms for data protection
d) Collaboration with international cybersecurity organizations

Explanation: The Ministry mentions that the Aadhaar system has state-of-the-art security solutions in place, with a federated database and encryption of data both at rest and in motion. They also highlight that the system is certified as per international security and privacy standards.

6. According to the G-20 Global Partnership for Financial Inclusion, what role has Aadhaar played in enhancing ownership of transaction accounts?
a) It has led to a decrease in ownership of transaction accounts.
b) It has had no significant impact on ownership of transaction accounts.
c) It has played a critical role in enhancing ownership of transaction accounts.
d) It has had a negative impact on the adoption of transaction accounts.

Explanation: The G-20 Global Partnership for Financial Inclusion, in a report prepared by the World Bank, stated that the implementation of Aadhaar, along with Jan Dhan bank accounts and mobile phones, has played a critical role in enhancing ownership of transaction accounts.

Brief Summary | UPSC – IAS

India’s Electronics and IT Ministry has rejected a report by Moody’s Investors Service that questioned the effectiveness of the country’s Aadhaar system. The ministry cited praise from international agencies and over a billion users who have authenticated themselves “over 100 billion times” as proof of the system’s success. Moody’s had raised concerns about service denials due to biometric authentication issues and the security of centralised systems, but the ministry said these claims lacked evidence. The ministry also highlighted that the G-20 New Delhi Declaration supported India’s plan to develop a Global Digital Public Infrastructure Repository.