Thursday, April 9, 2009

A national identity card for Indians

One of the most challenging long term project for ensuring effective delivery of welfare programs in the country is the generation of a comprehensive social security database of all the citizens. A multi-purpose smart card, incorporating various static and dynamic details, can be invaluable in tracking and monitoring the implementation of all government programs, taxation, national security, electoral rolls etc.

The Government have earmarked Rs 100 Cr in the interim budget to kick-start an ambitious Unique Identification Project, which would seek to assign a unique identification number to each citizen. A Unique Identification Authority of India is being established under the aegis of the Planning Commission.

Though a few state governments, most notably the Andhra Pradesh government with its Multi-purpose Household Survey (MPHS), have made some attempts, they have failed to yield the desired benefits. All these efforts to develop a database have worked on the assumption that we need to develop it as a one time exercise and it has to be done by the government. Such single stop exercise are bound to fail given the size and scope of the project. An alternative model would be enable the evolution of the card in an incremental manner over a period of time. Once the card is issued, its scope can be continuously expanded to capture data on other services. In this way, over a three to five year period, an incrementally evolving, comprehensive and reliable database can be developed.

Issuing a social security card and using it consists of the following activities
1. Identification of the specific parameters to be captured
2. Identification of the beneficiaries
3. Capturing the beneficary details - retinal or fingerprint scan
4. Appropriate smart card readers to validate the required information when the beneficiary presents him(her)self to take delivery of the service.

While the first has to be the done by the government. The second can be thrown open to all the citizens on the condition that only those with such cards will be allowed to partake of welfare benefits or vote in election or use their ration cards, after a specified date. The third and fourth activities can be easily outsourced to private agencies for a user fee. In fact, these two activities can be franchised out district wise to private agencies.

Or alternatively in a few districts they can be allotted to unemployed youth who can set up such mobile/stationary kiosks and can leverage it for delivering other services for a user fee. At say Rs 100 per card, incorporating all smart features, such card for 100 Cr inhabitants would work out to just Rs 10,000 Cr. Here too, the cost can be minimized by subsidizing only the poor. The total cost would not go beyond Rs 5000 Cr.

One place to start is to collect the voter data by the Election Commission. The forthcoming census of 2011 is another opportunity to come up with a smart social security card. The database should be dynamic and flexible enough to keep adding and updating data as the card usage expands to cover other services. This same card can be used to progressively deliver some or all of at least the following services
1. Welfare pensions
2. NREGS wages
3. Self Help Group (SHG) loans
4. Crop procurement prices
5. Farm loans
6. Self-emloyment loans and similar individual benefits
7. Student scholarships
8. Property Taxes
9. Income tax
10. Credit and debit cards, bank accounts
11. PDS

In order to better manage the political sensitivities and ensure uniformity in technology standards and data collection, it may be appropriate for the Government of India to initiate this process, after due stakeholder deliberations. The Government of India can prescribe certain minimum database and technology standards and direct that all the aforementioned services should be delivered only through this smart card. The database of all these services should then be integrated into a single, unified master database (updated real-time or with some periodicity), so as to capture all changes and updations. It is not as insurmountable challenge as it seems since many of these services have bank account interface or are already being delivered through bank accounts, which are already integrated in single database.

Alternatively, the state governments may decide on state specific entry point services for issuing smart cards. NREGS, with its massive base, is one of the easier sources of preparing a comprehensive database. Once the NREGS is captured, it can be expanded to cover welfare pensions, SHG loans, PDS etc by duly incorporting the relevant fields. Wherever the fields have to be rigorously verified, appropriate validatory checks can be put in place so as to ensure that the data is captured only after authentication.

1 comment:

Makarand Prabhune, CFA said...

If the project is successful, it would indeed bring immense benefits to all.