Nandan Nilekani is the de facto chief information officer for India. Last July, he left Indian outsourcing company Infosys (INFY), where he was serving as chairman after spending five years as CEO, to become chairman of the Unique Identification Authority of India, an ambitious government project to create IDs and supporting biometric data, such as fingerprints, for more than 1.1 billion Indians. Nilekani, 54, and his team of several dozen engineers hope to launch next year and provide 600 million IDs within the first five years. Meantime, he has also started advising other parts of the government—including the Finance Ministry and Transportation Ministry—on how to use information technology to improve their operations. He recently spoke to Bloomberg Businessweek Asia regional editor Bruce Einhorn in New Delhi.
You were the CEO of Infosys, one of the top IT outsourcing companies in the world. Why give that up to create IDs?
My life has been a series of happy accidents; this is one of them. When the prime minister asks you do something, you can't refuse.
Well, some people could figure out a way. What made the offer attractive?
It's a humongous project, the mother of all projects. The purpose is to give a number to everyone, [including] the large number of Indians who don't have an acknowledged existence by the state. There are 75 million homeless, without birth certificates; many of them don't have the badges of identity that the rest of us have. If you are going to have all this [economic] growth, all these people who are marginalized should be given a chance. Unless you have an identity, you can't get a phone, a bank account, or public services. You don't get a ration card. This needs to be set right.
How does your project do that?
We think the unique ID has the advantage of helping to improve the efficiency of government spending as well as giving identity to people who were denied the chance to participate in the national economy. It's the door that opens all doors.
In the U.S., people have been getting Social Security numbers for decades. So what's the tech angle to what the Indian government wants to do now?
When Roosevelt put in massive social welfare programs, they had to have a good way of identifying people. The Social Security number came out of that. One of the first users of computers was the Social Security Administration: They had to keep track of everybody. In some sense, it's like back to the future. We are going to give one number per person: It's a Social Security number, but it also has biometric stuff. The fingerprint is on the server.
You'll be verifying people's identity online. What will that enable?
Once you have this online authentication, it opens a whole new area of applications. That's the real strength, the real payoff is from that.
Similar to apps for the iPhone?
It's like an open platform. People can build applications for a variety of purposes.
We have 600,000 villages in India—and only 6% have bank branches. The revenues in these areas don't pay for the costs, and therefore banks are reluctant to open branches. So a bank without a branch in a remote village can appoint an agent … a grocer in the village who's dealing with cash anyway. A customer can go to the agent, put his finger there [to verify his ID number], then connect to his bank account and withdraw 500 rupees. The agent is like a branchless extension of the bank. This will cost less than 10,000 rupees; an ATM costs several hundred thousand or more. ATMs need electricity, cash to be replenished, security, shatterproof glass, guards. It all adds up.
You're also working with the Finance Ministry and the Transportation Ministry, providing them with advice on how to use IT to make their operations more efficient. Some people say you're effectively India's chief information officer. Do you think you'll be able to address India's biggest problem, the poor state of infrastructure in the country?
I'm focusing on some of the soft infrastructure components. If we can give everybody a unique ID number, if you can get people a bank account, a mobile number, this gives them a leg up, a set of tools to meet their aspirations. You can think of this as soft infrastructure. If we are able to implement a good, clean design for creating a national toll network, that has an impact on hard infrastructure: Trucks will move smoother, faster. One of the projects on the financial side is reengineering the way taxes are paid in India. They have all kinds of spin-off benefits.
In a country that's home to Infosys and so many other IT outsourcing companies, the Indian government has been slow to embrace technology. Why now?
This is actually a very exciting time. There's an acknowledgement by the government that large transformations need technology and need a whole new approach to implementation. The fact is, over the past three decades, the IT industry in India has become more and more sophisticated—world-beating and all that. In some sense, if you add up all that, plus my role, this is an opportunity to bring to the Indian system some of the benefits, some of the experiences, that Indian organizations have gained globally. We are marrying these two worlds.
And how's the marriage working out?
So far it's great. I'm having a really good time. The government has been really supportive.