NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Friday, September 18, 2015

Mahatma Gandhi refused to join the Constituent Assembly that wrote our wonderful Constitution, but his advice to some of the members was, “Whenever you are in doubt, apply the following test. Recall the face of the poorest and the weakest man you may have seen, and ask yourself if the step you contemplate is going to be of any use to him. Will he gain anything by it? Will it restore him to control over his own life and destiny? Will it lead to swaraj for the hungry and spiritually starving millions?” I submit that the recent Supreme Court (SC) interim judgment on Aadhaar does not pass the Mahatma’s test and it must be appealed. All it needs is one small tweak.

To meet the unleashed aspirations of a billion people, “business as usual” will not do. The Indian state must use technology in a transformational way to accelerate social and economic justice and expand opportunity for all at scale and speed. Two of the four SC directives are unfair. The first two — wide publicity of Aadhaar being non-mandatory and ensuring that no benefits due to any citizen are denied without an Aadhaar card — are useful. But the last two — no use of Aadhaar cards or its information for anything other than PDS ration shops and LPG cylinders — must be appealed on the grounds of individual choice and the freedom of the executive to frame policy.

But let’s start with the facts that dispute some of the filings in this case. For example, in the banking sector, Aadhaar is completely voluntary and has not been made mandatory by the RBI. No banking information is shared with the Unique Identification Authority of India (UIDAI); all customer banking transactions are held by regulated banking entities governed by bank secrecy laws. The UIDAI system is completely ignorant of the usage of Aadhaar for seeding and for the Aadhaar Payments Bridge (maintained by the National Payments Corporation of India, an RBI-regulated entity). When a customer does an Aadhaar authentication at, say, a microATM, the Aadhaar system knows that an authentication was done, but not the purpose for which it was done. Similarly, when an electronic know your customer (eKYC) is done, the Aadhaar system releases the name and address to a regulated entity, but does not know the purpose. Also, whenever a person’s Aadhaar number is used for an authentication or an eKYC, he gets an alert by SMS/ email that his number has been used. The Aadhaar system ensures privacy by design — it uses a federated architecture, that is, banking data is wholly inside the banking system, healthcare data wholly in the healthcare system, etc. Moreover, a person can elect to “lock” her own Aadhaar number, so no authentication or eKYC is ever done without her “unlocking” it. Biometric data is never shared by the UIDAI under any circumstances.

The first ground for appeal is the freedom of individual choice. Enrolment in Aadhaar is voluntary and individuals granting permission for the UIDAI system to share their name and address in a secure way with another system for their own convenience and benefit hardly qualifies as a violation of their right to privacy. The upsides of the voluntary use of Aadhaar for financial inclusion, for example, are immense. Aadhaar is used by individuals in the banking system to: First, open an account with eKYC; second, seed an already opened bank account; third, receive government benefits through the Aadhaar Payments Bridge; and fourth, withdraw money from a microATM using Aadhaar biometric authentication. All four uses of Aadhaar are voluntary, but simpler, faster, cheaper and far more convenient than the alternatives. The data is only shared with the customer’s consent. Most importantly, the same data is already widely available on the internet via election rolls.