Aadhar Project – Centre responds as Moody’s raise concerns

Aadhar Project – Centre responds as Moody’s raise concerns

News: Moody's Investors Service has recently raised questions regarding the reliability of Aadhaar, specifically concerning biometric technology's effectiveness in India's hot and humid climate.

What concerns were raised by Moody’s?
• UIDAI-Aadhaar system often results in service denials, and the reliability of biometric technologies, especially for manual laborers in hot, humid climates, is questionable.
• Certain categories of digital ID, especially those under central control, are susceptible to misuse or exploitation – a concern that becomes particularly salient when sensitive biometric data like fingerprints or facial recognition information are involved.
• The lack of well-defined and universally accepted standards for various components within the Decentralised digital (DID) architecture – such as data formats, communication protocols, cryptographic methods, and verification procedures – hinders the ability of different DID systems to work together efficiently and seamlessly, known as interoperability.

How did Meity respond?
• The report in question does not cite either primary or secondary data or research in support of the opinions presented in it.
• The report ignores that biometric submission is also possible through contactless means like face authentication and iris authentication. In addition, the option of mobile OTP is also available in many use cases, said the ministry.

What are the advantages of Aadhar project?
• Aadhaar has helped to remove fake and duplicate identities of beneficiaries. It has been used to filter the list of beneficiaries and stop the leakage of public money.
• JAM trinity (Jan Dhan Yojana, Aadhaar and Mobile numbers) has been employed for targeted delivery of subsidies. It has led to savings of Rs 50,000 crore per year by plugging the leakages in most schemes.
• Aadhar Card linked bank accounts receive their LPG Subsidy directly. All that’s needed is to link the Aadhaar Number to the 17-digit LPG consumer identification under the PAHAL Scheme.
• Use of Aadhaar in income tax filing has reduced the number of documents needed for filing income tax. It has made the process more efficient and cost-effective.
• Aadhaar project has been used to transfer pension money on time, issuance of digital Life certificate and easy Provident Fund disbursement.
• Aadhar has been helpful to map skilled manpower.

Issues:
• Privacy and Security Concerns: There are concerns about the privacy and security of the data collected under the Aadhaar project. Critics argue that the centralization of such sensitive data could lead to misuse or unauthorized access.
• Exclusion from Basic Services: There have been instances of people being excluded from basic services for lack of an Aadhaar or due to issues with biometric verification.
• There are issues in the functioning of UIDAI like issues of data-matching, errors in authentication, and shortfall in archiving.
• Data Leakage: There have been reports of inadvertent leakage of several million identification numbers from the project.
• Widespread cases of Duplication of Aadhar.
• Aadhaar project has experienced high rates of failures in authentication, leading to delays in the disbursal of benefits in remote areas with poor internet connectivity.
• Aadhaar data have been used by fraudsters for criminal purposes such as identity theft, Know Your Customer (KYC)-related fraud etc. Ex- Loan scams.

Way Forward
• Decentralisation of Aadhaar data – In decentralized ID (DID) systems, personal data is saved in a user’s digital wallet and identity verification takes place not via a single, centralized institution but on a decentralized digital ledger such as a blockchain. This increases privacy and reduces the amount of personal information held by intermediaries.