One of the major challenges India faced 10 years ago was that more than half of the population didn’t have any personal identification. They didn’t have anything to prove their address or their date of birth. Most people couldn’t open a bank account because they simply didn’t have any documents.
The UPA Government launched the Aadhaar project in 2010. It entailed giving every Indian a unique number that could be authenticated electronically. Over the last 7 years, about 1.19 billion Indians have got the unique identity number through a biometric process that takes fingerprints and iris scans. Everyone with an Aadhaar card now has an identity number. This has had remarkable benefits for the poorest of the poor and it has empowered women most of all.
In the last three years, more than 300 million Indians have opened bank accounts using their Aadhaar cards, most of them initially with zero balances through the Prime Minister’s Public Wealth Scheme (PMJDY). The rate of financial inclusion for Indian women increased by 24 percent between 2014 and 2015, compared with an increase of 14 percent among men. During that time, the government also launched a scheme to reduce dependence on kerosene and biomass used for cooking, which created smoke and health hazards, and began giving out free stoves that run on liquefied petroleum gas (LPG) along with a monthly subsidy to cover the cost of the gas.
By paying that subsidy into beneficiaries’ bank accounts via the Aadhaar system, this has encouraged more women to not only open but also operate their bank accounts. Over 35 million poor women have benefited so far and the program aims to reach 80 million.
Also during the last three years, 65 percent of poor Indians have had their ration cards linked to their Aadhaar numbers. This enables women in particular to get rations at a very subsidized rate. Due to the Aadhaar card, elderly women in India now get their pensions digitally credited to their accounts, instead of in cash. Girls get their scholarships paid into their accounts. And all federal government benefits go to account holders directly.
These automatic payments reduce the need for women and girls to travel to collect their money, which can be expensive and inconvenient, and cuts out the need for intermediaries, a process which is vulnerable to corruption. The move to direct account payments also eliminates millions of fake claims and decreases the diversion of funds, saving more than $10 billion of public funds so far and ensuring that more genuine claimants get their benefits.
Now, if someone requests proof of your identity, say to open a bank account, all you need to do is press your thumb onto a machine which authenticates your print and confirms your identity. Today, opening a bank account takes four hours or so as opposed to six days in the past; opening a mutual fund account takes four minutes as opposed to four days; and getting a SIM card takes two minutes as opposed to a day. That convenience makes it easier than ever for women to participate in the formal economy.
There is criticism that Aadhaar is turning India into a surveillance state, that the state is violating privacy by storing the data. This is wrong. There is no single national database of all transactions done by an individual who has an Aadhaar card as Aadhaar is not a database of transactions. The transactions are in different databases and protected by different laws. For example, banking transactions are protected by one law, and ration card details are in a database protected by another law. Google and Facebook have more sensitive data on their users than the Aadhaar system has on registered individuals.
The Supreme Court of India in a recent judgment also said that all Indians have a fundamental right to privacy and an individual has ownership of his or her personal data and that cannot be misused. In the wake of that ruling, the Unique Identification Authority of India (UIDAI), which runs the Aadhaar program, has launched tighter security features to protect the system against data breaches.
Many also say that Aadhaar technology is difficult to operate and keeps people out of the system. For example, they say a poor woman in a remote area cannot get her ration if the machine is not able to authenticate her data for some reason. But Aadhaar law says in the event that authentication fails for whatever reason, like lack of electricity, then the cardholder should be asked to produce another form of identity, a ration card, or a copy of their Aadhaar registration form, and cannot be denied their entitlements. Yes, some officials deprive people of their benefits, but that is a dereliction of duty by the official.
I believe that Aadhaar is a great tool of empowerment, especially for women who earlier lacked identity, who could not open or operate bank accounts, and who could not get government benefits. Aadhaar enables women living in villages to receive money via their mobile phones from their sons, daughters and husbands living in cities. It allows women to transfer money with almost no cost.
Many women now have mobile phones and my dream is that in the next few years, every woman in this country will own a smartphone. The government should come up with a scheme to distribute smartphones to every poor woman in the country as done for LPG. This would enable women to access their rights more seamlessly, they can do so many things like operating their bank accounts and using other services from their phones.
Of course, one ID card can’t provide all of the solutions to women’s financial inclusion in India. We also have to look at sources of employment for women.
One is formal employment, which means women have to get an education. We have about 35 million young people attending colleges, of which over 16 million are girls.
There is also a large number of women who do not get a good education. They must be given the skills and tools they need to participate in the workforce. That means removing any possible discrimination, which could include the motherhood penalty. The government has said that maternity leave can be up to six months, but more maternity benefits like creches have to come.
There are many changes we need to make to ensure women in India gain equal economic participation to men. With Aadhaar, India is telling the world that it is possible to create an inclusive digital society where the poorest of the poor are not left behind.
The views expressed in this article belong to its author and do not necessarily reflect the editorial policy of Women’s Advancement Deeply.