The Digital India program, one of the flagship schemes of the Government of India under Prime Minister Narendra Modi was started with an aim to “transform India into a digitally empowered society and knowledge economy”. The program from a quick glance through the website seems to revolve around e-governance and all the initiatives under it can be seen as a means to enhance the same. While there are a number of good initiatives like the Single Window Interface for Trade (SWIFT) which is much needed for ease of business , the Government in the last few months has taken a path that leads to more and more questions with every passing week. Specifically, the forcefulness in pushing people towards cashless transactions and the Aadhaar card is particularly disturbing. Let us take up the concerns with cashless transactions first.
In the few weeks that followed the demonetisation, the Prime Minister urged the people to bear with the inconvenience for 50 days and the citizens of the country responded magnificently which was the prime reason for its success. The people of India continued to bear the inconvenience even after the 50 day period with withdrawal limits being put in place until the middle of March when it was finally lifted . However, the end of March and the beginning of April, 2017 have seen complaints of ATMs running dry again and the reason appears to be underestimation by the Reserve Bank of India in assessing the actual currency requirement and its ability to provide the same as per the article  from Sucheta Dalal, Managing Editor, Moneylife. Additionally, reports have emerged that the RBI intends to print fewer notes (around 1.7 lakh crore worth) while the amount of cash in the system at the end of March was still around 26% less that pre-demonetisation levels .
One argument often repeated post demonetization is that the system does not need the same level of cash as the currency stashed by hoarders were never really used by common people and therefore can be removed from the system. That is, by printing fewer notes. One has to only look as far as the recent IT raids  to conclude that this argument falls flat on its face. Hoarding of cash (especially black money) has become a way of life for those practicing it that a single act of demonetisation is not going to put an end to it. There were a number of stories as to how the black money hoarders used people from low income groups to deposit the old notes. With the withdrawal limits being lifted, there is every chance that a sizable fraction of that money has been withdrawn from the banks again and has reached the hoarders. Therefore, there is now less cash available not for the hoarders as per the argument but for the people! Additionally, with banks looking to charge for ATM withdrawals , even common people are likely to withdraw and hold more cash than what is needed.
The questions then follow:
ØHas the Finance Ministry made a huge oversight in not accounting for this scenario and trying to mask their error by adding the shift to cashless transactions as a reason of demonetisation?
Ø Is it really fair, to ask common people to change their way of life because the Government has failed to check hoarding of cash?
ØShould the RBI not print enough notes so that the total cash in the system is the same as pre-demonetisation levels so that common citizens do not suffer as a result of hoarding and the lethargy of the Government in apprehending and punishing hoarders?
The writer is not against a less-cash economy, but the cash ought to be removed from the system as and when it gets seized from the hoarders and not by printing fewer notes. Since the situation in India is such that there is a reasonable chance that even benamis may have benamis, the process of IT raids on hoarders and seizing money is bound to take years. However, instead of taking cognizance of the problem, the Finance Ministry appears to be refusing to even consider the possibility that many people are frustrated by having to resort to digital transactions even in places where they do not feel safe using it. And in some situations (people taking home deliveries for example), cashless transactions is simply is not possible in most cases. In fact, if the cash problem compounds at the ATMs , the attitude of the Finance Ministry looks like they may well push other ministries into making Aadhaar Pay compulsory for Government services like fuel, telecom etc. Such a move if comes to pass is bound to irritate people even more as it serves to further highlight that the Finance Ministry and RBI have been ineffective in the implementation of re-monetisation and are trying to mask it by forcing digital transactions. And this brings us to the other big concern of the Digital India scheme.
The Aadhaar card has seemingly become mandatory for all intents and purposes – the Government’s Holy Grail, so to speak. There are currently a long list of schemes tied to it , and this list is rapidly growing longer and longer. There has been much written about the privacy of individuals and while the writer shares these concerns, there is not much to add. However, a number of questions remain and they are as follows:
ØWhy does the Aadhaar Act state that it extends to the whole of India except the state of Jammu and Kashmir , while the Passport Act  simply states that it extends to the whole of India?
ØWhy does the Government accept Aadhaar card as proof of address for documents like passport  when Chapter II point 4(3) of the Aadhaar Act  states that the card may be accepted as proof of identity but does not mention proof of address?
ØThe Finance Minister on the floor of the Parliament responded – “Yes, we are” on being questioned if Aadhaar was being forced by the Government . Can the Finance Minister answer how forcing Aadhaar card is going to help in prosecution of high-profile corrupt politicians, for which the mandate was given, with an example?
ØCan the Finance Minister also answer if it is possible for any official with access to the Aadhaar database, to block an individual’s access to his/her bank accounts through the Aadhaar system without notifying the individual? This question is important not in the scenario of an honest government dealing with a corrupt individual but in the case of a corrupt government looking to silence an law-abiding individual who fights that corruption.
ØIn a recent interview, Nandan Nilekani challenged critics of the Aadhaar card to show one example of data theft and claimed the database was very, very secure . Even if one takes him for his word, there are many organizations (private and public) which use biometrics to capture the attendance of employees. As a result of the Finance Minister making it mandatory to link Aadhaar numbers with the PAN card, these organizations are now bound to collect Aadhaar data of their workforce. Consequently, the databases of these organizations have both the Aadhaar number and the biometric data. Are these databases not targets for hacking and potential misuse? Can Nandan Nilekani vouch for the security of these databases as well?
ØCan Nandan Nilekani and the Government of India give an assurance that in the event of a corrupt UIDAI body appointed by a future government, there is no way for them to undo all the security features and enable hostile forces to hack into the database?
ØAnother recent intriguing comment came from NITI Aayog CEO, Amitabh Kant who opined that credit and debit cards would soon become a thing of the past  with biometric modes becoming the norm. Does this mean that over the next months or years, that there is going to be a push from the Government to foreign merchants to start accepting Aadhaar Pay like they do cards? If such a thing happens, one would assume foreign merchants would be only too happy to oblige given the number of potential users. What would happen to data security in that event is anybody’s guess.
ØThe demographic information as per the Aadhaar Act  does not include medical records. However, the Online Registration System  now encourages people to link their Aadhaar data with the Unique Health Identification to maintain and in future facilitate an electronic health record across hospitals. One would imagine Aadhaar linking would be made mandatory in the not too distant future. Can the Ministry of Electronics and Information Technology (they maintain the ORS website) explain how these electronic records are separated from the Aadhaar database and who is accountable for the medical records which also contain the Aadhaar number? Also, do we really believe that this information will not reach foreign pharmaceutical companies through either corrupt officials or even the hospitals?
ØThe chapter VI of the Aadhaar Act which deals with offences and penalties of various kinds includes a three year imprisonment and a fine of not less than ten lakh rupees as punishment to violators in point 38 . However, do those who legislated the Act realize that once the data reaches the internet, it is practically impossible to save it from being permanently compromised? Does a three year punishment not seem too small for such offences? Can the Law Ministry answer what was the basis for this level of punishment considering the Aadhaar is set to become a one of a kind scheme in the entire world?
ØFinally, there is one larger question concerning national security. In a scenario where India enters into a war, does the Aadhaar database not become the prime target for the enemy? Can the country hold its own even if the database is breached or will all hell break loose? The question is particularly important as the Aadhaar card is linked to bank accounts and payments are possible through it. In the writer’s line of thought, no other breach of any other database will hurt the country as badly as a breach of the Aadhaar database. Any system has to be designed to withstand the worst case scenario and not the best case. The writer does not want an answer to this question as no Government will or even should disclose its strategy for worst case scenarios. One only hopes they have accounted for it and the Aadhaar database is protected at least on par with the country’s best kept defense secrets.
It seems fitting to conclude with two of the Prime Minister’s tweets posted before the 2014 elections. The first and one that was circulated on twitter by critics of the Aadhaar card reads – “On Aadhaar, neither the Team that I met nor PM could answer my Qs on security threat it can pose. There is no vision, only political gimmick” . The second one reads – “Digitization of our ancient scriptures can go a long way in preserving & further popularizing Ayurveda, particularly among our youth” . It is indeed a remarkable irony that three years later, the Aadhaar card scheme occupies a prominent place in the Digital India initiatives , while the digitization of ancient scriptures has not even been listed.
1. About Digital India, Introduction http://www.digitalindia.gov.in/content/introduction , Ministry of Electronics & Information Technology, Government of India, Accessed on 6 April 2017
2.Single Window Interface for Trade (SWIFT) http://www.digitalindia.gov.in/content/single-window-interface-trade-swift , Ministry of Electronics & Information Technology, Government of India, Accessed on 6 April 2017
Demonetisation comes full circle, all cash withdrawal limits lifted from today http://economictimes.indiatimes.com/news/economy/policy/demonetisation-comes-full-circle-all-cash-withdrawal-limits-lifted-from-today/articleshow/57615941.cms , IANS, Economic Times, Updated 13 March 2017, Accessed on 7 April 2017
Where is the currency going? Why are ATMs dry? http://www.moneylife.in/article/where-is-the-currency-going-why-are-atms-dry/50153.html , Sucheta Dalal, Moneylife, 4 April 2017, Accessed on 7 April 2017
Cash in use 26% less than November 8 levels, withdrawals fall for fourth week http://economictimes.indiatimes.com/industry/banking/finance/banking/cash-in-use-still-26-less-than-november-8-levels-withdrawals-fall-for-fourth-week/articleshow/58099149.cms , Gayatri Nayak, Economic Times, 10 April 2017, Accessed on 10 April 2017
I-T raids reveal Rs 100 crore changed hands in Tamil Nadu assembly segment http://www.hindustantimes.com/india-news/i-t-raids-reveal-rs-100-crore-changed-hands-in-tamil-nadu-assembly-segment/story-5lGJFC7MzFeAsMWxtuuSWI.html , IANS, Hindustan Times, 7 April 2017, Accessed on 7 April 2017
Banks may hike ATM withdrawal charges; more step to curb cash in coming months http://www.hindustantimes.com/business-news/banks-may-hike-atm-withdrawal-charges-more-measures-to-curb-cash-in-coming-months/story-f7YrlwOaaqMK1tWY31zJFJ.html , Mahua Venkatesh, Hindustan Times, 2 March 2017, Accessed on 7 April 2017
The long list of Aadhaar linked schemes http://www.thehindu.com/news/national/the-long-list-of-aadhaar-linked-schemes/article17641068.ece , K Deepalakshmi, The Hindu, 24 Mach 2017, Accessed on 8 April 2017
The Aadhaar (Targeted Delivery of Financial and Other subsidies, benefits and services) Act, 2016 https://uidai.gov.in/images/the_aadhaar_act_2016.pdf , Printed by The General Manager, Government of India Press, Minto Road, New Delhi and published by the Controller of Publications, Delhi, 26 March 2016, Accessed on 2 April 2017
The Passports Act, 1967 http://passportindia.gov.in/AppOnlineProject/pdf/passports_act.pdf , Ministry of External Affairs, Government of India, 24 June 1967, Accessed on 2 April 2017
Proof of Address, List of acceptable documents http://passportindia.gov.in/AppOnlineProject/popuponline/AttachmentAdvisorSub?subDocID=7001&minorFlag=1 , Ministry of External Affairs, Government of India, Accessed on 2 April 2017
'Yes, We Are', Was Jaitley's Reply In Parliament When Asked If Govt Was Forcing The Aadhaar Card On Citizens http://www.huffingtonpost.in/2017/03/23/yes-we-are-was-arun-jaitleys-reply-in-parliament-when-asked_a_21978066/ , IANS, The Huffington Post, Times Internet Limited, 23 march 2017, Accessed on 8 April 2017
'Show me even one example of data theft. Aadhaar is very, very secure' http://timesofindia.indiatimes.com/home/sunday-times/all-that-matters/show-me-even-one-example-of-data-theft-aadhaar-is-very-very-secure/articleshow/57966495.cms , Asha Rai, The Times of India, 2 April 2017, Accessed on 8 April 2017
ATMs, credit, debit cards set to disappear: Niti Aayog CEO http://economictimes.indiatimes.com/news/economy/policy/atms-credit-debit-cards-set-to-disappear-niti-aayog-ceo/articleshow/57960251.cms , IANS, The Economic Times, 1 April 2017, Accessed on 9 April 2017
Online Registration System http://ors.gov.in/index.html , Ministry of Electronics and Information Technology, Government of India, Accessed on 9 April 2017
PM Narendra Modi’s twitter post on Aadhaar https://twitter.com/narendramodi/status/453543852175925248 , 8 April 2014, Accessed 9 April 2017
PM Narendra Modi’s twitter post on ancient scriptures https://twitter.com/narendramodi/status/438329764374274050 , 25 February 2014, Accessed on 9 April 2017
Digital India Initiatives http://digitalindia.gov.in/di-initiatives , Ministry of Electronics and Information Technology, Accessed on 9 April 2017