In a developing nation, sometimes the first step is just proving who you are.
The Unique Identification Program
Shivanna was a 55-year-old Indian farmer from Gagenahalli. In Gagenahalli, three-quarters of the population lives on less than $1 a day, the homes are made of dried mud, and most people are landless peasants.
One day, a man walked through the village while banging a drum. Trying to get everyone’s attention, he asked people to gather at the local schoolhouse to hear about the Unique Identification program (UID). They just needed to get their fingerprints taken, their irises scanned, and some data recorded. And then, never having had birth certificates or driver’s licenses, or voters cards, for the first time, they could prove who they were with a 12-digit Aadhaar number.
The Economic Benefits
When you can confirm your identity, you can create a bank account. Even if no bank has an office nearby, you can use your cell phone with a local storekeeper. As the bank’s “local correspondent,” that person facilitates deposits and withdrawals. Then you can save small amounts and, because millions of people are just like you, the financial system gets massive injections of new cash. In addition, signing up for government assistance, you can prove you are receiving the subsidy instead of someone who might falsely claim to be you. And that 40-mile trip and the wasted hours for your government handout are no longer necessary because of electronic transfers.
The UID program is targeting people like Shivanna in the countryside, Kiran, an illiterate mother of three children in Delhi, and Mohammed in a homeless shelter. In this January, 2012 econlife post, we told more about the specifics of the program. Since then, the number of enrollees in India has grown to 200 million.
Our Bottom Line: An Identity Infrastructure
Sources and Resources: This Wired Magazine article provide a wealth of detail, fascinating examples and a video link about India’s UID program. For a more academic perspective that links India’s program to other developing nations, this paper was excellent as was this New Yorker profile of Nandan Nilekani, the businessman who made it all possible. Finally, this FT Tim Harford column was the best up-to-date analysis of India’s program.
This post was slightly edited after publication.