India Strikes Uncomfortable Balance on Biometrics

(Bloomberg Opinion) -- India's extraordinary attempt to give every resident a biometric ID, the Aadhaar project, has just been declared constitutional -- in part -- by the country's Supreme Court. It was hard to imagine any other outcome; too much time and money had been spent on Aadhaar, and too many of India's poorest people had waited patiently in line for their chance at some form of proof of identity. But the decision, coming as it did after the court last year asserted that Indians have a right to privacy, is nevertheless fascinating. It tries to walk a line between Indians' newly asserted privacy rights and the great possibilities opened up by technology -- and in the process tells us a great deal about how such debates are likely to play out across the developing world.

The judgment drew a clear line between two kinds of use for biometric authentication. The first kind, for state-provided services -- welfare payments, taxation records and so on -- it declared acceptable. This is a relief to the government, which has boasted of the money it's saving by requiring welfare recipients to prove their identities biometrically.

But, millions of Indians left out of the Aadhaar system will now struggle. That seems a betrayal of what the Aadhaar project was supposed to be -- an attempt to give Indians without government-issued paperwork an additional, easy way to prove their identity. Instead, it sanctions what Aadhaar has become: a tool for bureaucrats to control who gets access to services.

A truly voluntary Aadhaar would leave the choice to use it up to ordinary Indians -- if, for example, they were denied a service because they couldn't prove their identity, or if they found their welfare payments being diverted. When the government instead enforces biometric identification, Indians' freedom is reduced and not enhanced.

The second way in which biometric authentication was being used was by the private sector. In the Supreme Court's judgment, this is illegal. Many anti-Aadhaar activists were overjoyed by the ruling and, indeed, there are excellent reasons to be worried about the indiscriminate collection of Indians' biometric data by private companies.

Yet the truth is that this is, again, somewhat worrying. The transformative potential of allowing companies access to a biometric database had already become clear; the system was so cheap and efficient that it let one new mobile phone provider enroll a million customers a day. Companies could scale up incredibly fast and customers could access the services they desired quicker. An entire fintech industry was growing up around Aadhaar.

Yes, I'm pleased that I -- like millions of others -- will no longer have to endure constant demands that I link my biometrics to my phone number or to my bank account. But, if I wanted to -- if it saved me paperwork, or helped me create a credit history, or got around my lack of other ID -- I should have been allowed to do so. Again, it feels like individual freedom has been reduced, not increased.

The notion that companies can partner with government in grand development schemes has taken another knock as well. The Indian government has plans for other secured digital databases. One for confidential medical records, for example, could allow patients to switch hospitals easily and also, perhaps, enable digital diagnostics. Another government database promises you the ability to save your driving license or your high-school diploma to the cloud. These will only be useful if companies can use them, too. Many in India have a bone-deep distrust of the private sector, and the behavior of some firms makes that distrust seem warranted. Yet we can't pretend that Indians' lives can be transformed without the private sector's participation.

There's a lesson here for all techno-utopians, even slightly skeptical ones such as myself. And that is that anything that creates centralized power will eventually be taken over by bureaucrats. Neither companies nor citizens will be given much of a choice. When designing other technological interventions that we hope will increase access and individual choice, this inevitable appropriation is something we should keep in mind.

Much of the developing world has been looking to India's biometric project with both admiration and apprehension. If it made a real difference to people's lives here, it could and would have been adopted everywhere. I fear, now, only the worst parts of Aadhaar will spread: the ones that give governments the power to make their citizens jump through hoops. 

To contact the editor responsible for this story: Nisid Hajari at nhajari@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Mihir Sharma is a Bloomberg Opinion columnist. He was a columnist for the Indian Express and the Business Standard, and he is the author of “Restart: The Last Chance for the Indian Economy.”

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