Identity theft is one of the fast growing crimes in America. According to the 2013 Identity Fraud Report released by Javelin Strategy & Research, in 2012 identity fraud incidents increased by more than one million victims and fraudsters stole more than $21 billion, the highest amount since 2009. The study found 12.6 million victims of identity fraud in the United States in the past year, which equates to 1 victim every 3 seconds.
On the other side of the world, in India, one of the biggest impediments to growth is not theft or misuse of an identity but a complete lack of one.
Publicly available estimates indicate that of India’s 1.2 billion people only 50 million have a passport, about 100 million people have PAN cards (used for filing taxes and conducting certain kinds of bank transactions) and another 200 million have driving licenses. It’s almost hard to believe but it is true: the vast majority of people in India do not have a formal identity.
Fraud runs rampant in ration card system
In fact, the baseline document for most people remains a “ration card” that allows access to subsidized food grains from a public distribution system. But because there is no definitive connection of a ration card to a unique individual – in other words no biometrics, no photos (requirements vary by state; in most cases only the photo of the head of household is required), and no protection standards (like holograms, tamper proof lamination, or embedded chips) – fraud and patronage run rampant in the system.
Next page: Government to introduce ID for all
In early 2009 the government decided to embark on a technologically formidable and politically risky journey of issuing a definitive 12-digit ID called Aadhaar to each and every citizen of India. From a national security and operational efficiency perspective, the need was pretty clear. If one thinks the U.S. has a problem with undocumented migrants, imagine a country like India, which shares contiguous (and very porous) land borders with as many as six countries, including Pakistan, Bangladesh, Nepal, Bhutan, China, and Myanmar.
And the folks from several of these countries physically look alike and speak the same set of languages that people in India speak. In other words, once an individual walks across the often undefined border, it is absolutely impossible to determine if he or she is a native-born Indian or an undocumented alien from across the border. And herein lies the problem: to prove who you are, in order to get that all critical ration card, you merely need proof of residence (or bring along two individuals to vouch for you) and – voila! With a ration card, it is nearly impossible for anyone to throw you out. Welcome to your new home, green cards not required.
India’s growth rates visible all around
India has racked up some impressive rates of growth during the last decade and a half. Visit India today and the impact of this growth is apparent at street level – new construction, millions of mobile phones and a sassy, new can-do attitude to go along with it. The tax receipts of the Central Government have improved considerably as well, up 49% in the last 2 years and slated to hit $250 billion (Source: http://indiabudget.nic.in) in this current fiscal year (2013-14).
Next page: Government schemes abused by fraudsters
But if the nation’s top line is getting a shine, good governance remains an issue. The government has launched many well-intended schemes to help with poverty alleviation and to ease chronic unemployment, including the well-known Mahatma Gandhi National Rural Employment Guarantee Act (NREGA), which guarantees a hundred days of wage-employment in a financial year to every rural household whose adult members volunteer to do unskilled manual work. While the objectives of this scheme are laudable, the actual execution is less so. A lack of a definitive, verifiable ID has meant that the government is paying countless “ghost workers” who do not exist in reality but have been manufactured expressly to pocket the cash provided by this scheme. In fact, there is a virtual cottage industry in the number of ways you can defraud the NREGA scheme alone, certainly enough to make Bernie Madoff look like a rank amateur.
Operational efficiency, visibility, and transparency are just as critical for sovereign entities as for enterprises. Maximizing revenue collections and optimizing how they are invested for the future are critical tasks for both entrepreneurs and for civil servants. For most governments however, the temptation to spend their way out is a lot greater than addressing the core issues of infrastructure and plumbing to ensure that the back office is running smoothly and citizens are being provided the services they need.
Identity project faces public opposition
Projects involving individual identities are generally a tough sell in democratic environments, and the UK recently abandoned a similar project in the face of intense public opposition. It is no different in India. For the past couple of years, this 12-digit number has been branded as the savior of the nation, a potential Fascist tool of repression, and everything in between.
Next page: Project will nevertheless go ahead
After being in constitutional limbo for a while, the Unique Identification Authority of India (UIDAI) has finally managed to prevail and is now well on its way to identifying the billion plus citizens of India. As of July 2013, about 450 million people had been officially tagged and identified, with the project slated for completion by 2014/2015. In fact, some states of India, like Andhra Pradesh, whose capital city Hyderabad is a tech mecca like Bangalore, will likely be among the first states finished, with 100% of Aadhaar’s enrollment completed before the year 2013 is out. The next step is to assemble the right analytical tools which, coupled with tight civil rights and privacy regulations, could put this big data – no, make that downright monster data – to work and make a real difference in the lives of millions.
SAP HANA powers apps built on top of ID platform
SAP is working closely with the UIDAI to develop various applications that are built on top of the Aadhaar identity platform, and which will power various services that are delivered to the general public. For example, if a bank has to validate the identity of an individual before doing a cash transfer, that identity authentication can be done using SAP HANA, because SAP HANA is not only fast, it also provides significant analytical insights that can be used by the financial institution to learn more about their business.
As another example of SAP HANA at work: In the southern Indian province of Tamil Nadu, the local dairy giant is a farmers’ cooperative called Aavin that sources its milk from 1.7 million individual family farmers who have very modest herds, typically less than 4-6 cows or buffaloes each, and of whom about half a million provide milk to the dairy in each of the 2 shifts daily. What the SAP HANA solution does in this case may sound modest, but is truly transformational in many ways.
- It uniquely identifies the milk producer using their Aadhaar ID which ensures that payments are made to the right person, not just the one who happened to be physically present at the collection center.
- The Aavin dairy company now knows exactly which individual or family is providing how much milk and of what quality, so they can use this information to incentivize loyal producers with rewards/ bonuses and other welfare services, like distribution of fodder/ cattle feed or disbursement of loans at subsidized rates.
- The production workers at the dairy now know more than they ever did before. The information about the quantity and quality of milk poured by every producer is stored on SAP HANA in the cloud and this information is made available in real time to help them predictively plan their production and distribution hours before the actual milk arrives at the collection facility.
Get a Bank account, mobile phone, and the vote
So, how do you fingerprint a billion? One finger at a time, and because folks who do manual labor may not have a biometrically-acceptable print, include an iris scan of both the eyes, and throw in a good old-fashioned photograph to create that absolutely unique ID that can be used to open a bank account, get a mobile phone, vote, and yes, also get those subsidized rations from the public distribution system.