ormer Infosys chief Nandan Nilekani's Unique Identification Authority of India (UIDAI)-based projects are in a mess. The three oil marketing companies — IOC, HPCL and BPCL — undertook a UID-based delivery of domestic LPG cylinders in Mysore in February this year. Despite the extremely small target base, the project encountered problems at every step, from identification and biometric authentication of customers to non-cooperation of banks in funnelling subsidy monies to the intended recipients. The failure of the Mysore experiment raises serious questions about the last-mile delivery capabilities of Nandan Nilekani's ambitious and expensive Rs 18,000 cr Aadhaar mission. According to an assessment by the UIDAI, the rate of success of all three OMCs in delivering LPG cylinders in Mysore under this pilot project was about 67%. Biometric mismatch and assorted technological and human errors resulted in failures in every third delivery. Of the nearly 30,000 transactions over a four-month period, only 20,000 could be completed.
Not surprisingly, a similar project in Hyderabad has been scrapped, and the oil PSUs are demanding that another proposed pilot in Pune too should be shelved. Identification and authorisation of customers in itself has proved to be a gargantuan task. Routing subsidies thereafter in the form of direct cash transfers is likely to be even more challenging.
Nilekani's pet project has faced severe criticism from various quarters. Many have argued that Aadhaar could potentially rob private citizens of their privacy, but worse still is the possibility that the scheme may not even deliver a fraction of what it promises. A parliamentary standing committee on finance in its report last year was scathing about the whole idea, terming it as a colossal waste of government money. But UAIDAI chairman Nilekani has the full backing of the Prime Minister and Congress general secretary Rahul Gandhi, who sees Aadhaar as a great political tool to distribute government largesse.
It is one thing putting in place Six Sigma processes in the controlled environment of an organisation, which Nilekani did successfully at Infosys, but getting those very technology reliant processes to address poverty in a country of 1.2 billion is quite another. From the beginning there has been a lack of clarity on the cost the Aadhaar mission involves. The most conservative estimate is Rs 18,000 cr. Some studies show that it could go up to $6 billion. Other countries such as UK have abandoned similar projects because of sky high costs and outcomes that do not justify the big expenditure. Several arms of the government itself are at loggerheads with the UIDAI. The Ministry of Home Affairs has claimed in the past that it does not find the Aadhaar data fully reliable. It will collect its own biometric data.
The OMCs clearly are not happy with the additional burden of this cumbersome pilot project in Mysore. They have reported several issues with the hardware and the software. Their experience raises several fundamental questions about biometric identification and its implementability on a nationwide scale. If subsidy in the form of cash is directly transferred to the bank accounts of authorized customers, they argue that biometric verification at the point of is redundant. Connectivity of the handheld biometric devices is a big problem. Even in well networked urban cities such as Delhi, mobile handheld credit card machines are often unreliable. Rolling out massive welfare schemes in remote villages using such wireless devices at India's current state of technology preparedness is a distant dream.