The Largest Biometric System in the World

It has been called “the biggest social project on the planet.”

A major problem in India is that few poor people can prove their identity: they have no passport, no driving licence, no proof of address. They live in villages where many share the same name. These people cannot open bank accounts, and no one wants to lend them money. India has no equivalent of Social Security numbering, and just thirty-three million Indians, out of 1.2 billion, pay income tax.

But India’s relatively new program, the unique identity (UID) authority, will enroll approximately 400 million people by the end of this year. The scheme is voluntary, but the poor are enthusiastic about it. This Economist piece has some details, which relies on maintaining a huge database containing biometric information (ten fingerprints and an iris scan) of each of India’s residents:

For the poor, having a secure online identity alters their relationship with the modern world. No more queueing for hours in a distant town and bribing officials with money you don’t have to obtain paperwork that won’t be recognised if you move to another state looking for work. A pilot project just begun in Jharkhand, an eastern state, will link the new identities to individuals’ bank accounts. Those to whom the government owes money will soon be able to receive it electronically, either at a bank or at a village shop. Ghost labourers staffing public-works schemes, and any among India’s 20m government employees, should turn into thin air. The middlemen who steal billions should more easily be bypassed or caught.

That is just the start. Armed with the system, India will be able to rethink the nature of its welfare state, cutting back on benefits in kind and market-distorting subsidies, and turning to cash transfers paid directly into the bank accounts of the neediest. Hundreds of millions of the poor must open bank accounts, which is all to the good, because it will bind them into the modern economy. Care must be taken so mothers rather than feckless fathers control funds for their children. But most poor people, including anyone who wants to move around, will be better off with cash welfare paid in full. Vouchers for medical or education spending could follow.

The scheme based on biometrics is not without criticism, however. Nevertheless, the cost of enrolling each person into this program is about $2, so India’s program could be a model for other poor nations.

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