Demographics

A Fingerprint File for 1.1 Billion Indians


• "This gives them a leg up, a set of tools to meet their aspirations"

One of India's major problems is a lack of information about Indians. The government isn't sure how many there are, so it can't always plan policies effectively. Some 75 million homeless have no birth certificates, so they can't qualify for aid, register for school, get phone service, or open a bank account. Millions of other Indians have fake IDs to get assistance they're not entitled to.

Nandan M. Nilekani thinks he has a solution. The co-founder of IT outsourcer Infosys (INFY) has been drafted by the government to run a new agency, the Unique Identification Authority. The UIA is an effort to create ID numbers for all Indians, many of whom the state has missed. "If you are going to have all this [economic] growth," says Nilekani, "people who are marginalized should be given a chance." To make the system more secure, he wants to gather fingerprints from every Indian and store the prints on government servers.

A uniform ID system with biometric data, which should launch next year, could curb fraud and give millions of Indians access to aid. The program could "have a dramatic effect on poverty," says Reuben Abraham, a professor at the Indian School of Business in Hyderabad.

It could also make many new commercial transactions possible by allowing online verification of identities by laptop and mobile phone. Indian banks, for example, will be able to operate in remote villages without building costly branches. A customer can go to the bank's village agent—a grocer, say—get his fingerprint ID confirmed, and withdraw 500 rupees from his account. Once banks can serve all of India's 600,000 villages, rural Indians will be able to save and borrow, an enormous benefit to the economy. Says Nilekani: "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."

The bottom line: The government has been slow to embrace IT. Nilekani's biggest challenge will be overcoming bureaucratic inertia.

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Einhorn is Asia regional editor in Bloomberg Businessweek’s Hong Kong bureau. Follow him on Twitter @BruceEinhorn.

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