Aadhaar : A Waste Of Money ?

A Bangladeshi political party worker was recently arrested from a guest house in Kolkata, Salim Matbar was living under the fake name, Ravi Sharma. Police found an Aadhaar, a fake passport and other fake IDs on this person.

It makes us think of how useful Aadhaar actually is considering a non-citizen could get one?
Does Aadhaar defy the only purpose it was made for?

One of the first signs of trouble in Aadhaar paradise came early: When it was rolled out in 2009, Aadhaar was supposed to be revolutionary for India’s public distribution system. In conceptualizing Aadhaar, biometric technology allowed for a system that would check name duplications as well as prevent cyber fraud. Yet in previous years, the initiative has been dogged by problems, involved technological failures and legal action and ultimately risked serious misuse for criminal means.

The arrest of Salim Matbar has exposed glaring vulnerabilities in the system. Salim, who posed as “Ravi Sharma,” had acquired both a forged Aadhaar card and an Indian passport, which allowed him to work and move freely in the country. Salim entered India through some middlemen and used fake documents to bypass security and identity checks. Such an incident makes us aware of the ease with which Aadhaar is being exploited. The program relies heavily on the intermediaries for enrollment and thus leaves it susceptible to corruption and manipulation. 

A fraudulent person can bribe the enrollment agent to bypass verification processes or submit forged documents. Salim’s ability to acquire an Aadhaar card despite being a foreign national proves how badly the system has failed in its very basic goal of secure and authentic identity verification.

The issue, besides raising critical national security concerns, also brings to the fore several matters concerning the design of Aadhaar as a universal identity tool, which is often placed with full faith as a legitimate proof of identity. However, Salim’s case shows that it could easily be subverted with a serious consequence for internal security and public confidence in the system.

Technological Failure: Exclusion Instead Of Inclusion

Aadhaar was supposed to empower India’s most marginalized populations – by providing them a unique identity that would allow them to access government services – ironically, the very technology meant to include the underserved has often excluded them. The reliance on biometric authentication has become a major hurdle for many people.

The day-to-day wage laborers, whose fingerprints are worn out due to the nature of their work, often could not authenticate themselves. Senior citizens, the disabled, and poor rural residents, whose internet connectivity was limited, always came up with authentication failure issues. Authentication failure for rationing food rations has been reported by many villagers and shows how Aadhaar has failed to serve the person it intended to.

Studies further validate this bleak fact. For example, 17.4% of the pensioners in Andhra Pradesh were denied benefits due to biometric authentication failures, which mostly led to delayed or no disbursement of the same. Similarly, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) has reported average failure rates of nearly 8% in some states that leave vulnerable workers without timely payment. These numbers are not just statistics but real people being systematically denied access to essential services because of technological shortcomings.

Facilitating Fraud Instead Of Preventing It

The stated primary objective of Aadhaar has been to do away with corruption and prevent financial fraud. In a way, the introduction of this system has created avenues for fraudulent players. The entire gamut of financial services is now at the risk of being misused through fictitious Aadhaar-based bank accounts.

It relaxed its Know Your Customer (KYC) norms to accommodate Aadhaar-based verification, weakening established safeguards. The fraudsters exploited this by opening “mule accounts” for money laundering, subsidy theft, and other financial crimes. No robust mechanism to detect Aadhaar-linked fake accounts has been created, therefore it has become more of a liability than a safeguard.

Salim Matbar is but one example among many, how Aadhaar data can be exploited for money and identity fraud. The concern is that there is a centralized repository of all the sensitive data, both personal and biometric. Aadhaar information breaches have also been reported with millions of Indians exposed to identity fraud. Aadhaar, in its current form of a centralized system without robust security checks before enrollment, is not stopping fraud at all — it has instead taken the con to levels never seen before.

The Cost Of Aadhaar

The Aadhar project has consumed a significant amount of public money thereby casting doubts over its efficiency. Up until 2018, the government revealed their expenditure on the program at over Rs 9000 Crores (about $1.2 billion) with more to be spent for maintenance and upgrades.Given the system’s widespread issues, this expenditure appears increasingly difficult to justify.

From a financial perspective, these operational inefficiencies compound the already heavy economic burden of Aadhaar. Millions of Indians are forced to make multiple trips to enrolment centres for rectifying errors or re-validating their information leading to lost work hours. The cost in time and money of linking your Aadhaar to myriad services, often mandated insufficiently-prepared without enough prep-time, is an added layer wasted.

As per a response to an RTI application, UIDAI had spent around Rs 142.2 Crore to promote Aadhaar and get people to enroll, by November of 2015. Then later when the Supreme Court ordered to make it clear that Aadhaar is not mandatory, UIDAI spent almost Rs 8 Crore in advertising that while it was not necessary to get enrolled for Aadhaar, it would make our lives a lot easier if we did. 

Such waste of resources is particularly worrying in a country with pressing developmental needs. Those funds spent on Aadhaar would have been better used to improve education, healthcare, or rural infrastructure. Instead, they have all been channeled into an apparatus that often excludes its beneficiaries while empowering fraudsters.

Privacy And Legal Concerns

The project, since its beginning, has been under massive legal and ethical challenges. Its system is said to breach the right to privacy, which the Supreme Court itself validated in a landmark judgment in the Puttaswamy case by declaring privacy a fundamental right. The court permitted Aadhaar to remain but curtailed the compulsion of its usage for even the most essential services, such as food rations or pensions.

Despite these legal protections, the implementation of Aadhaar pays little heed to what the courts say. State governments and private entities continue to make Aadhaar mandatory for everything from opening a bank account to getting admitted to school. Such coercive use defeats the rights of citizens and creates new forms of exclusion.

The centralised nature of Aadhaar’s database is another critical flaw. Unlike other countries, whose systems are decentralized, the design of Aadhaar concentrates all the sensitive data in one repository and makes it a very good catch for hackers. Data breaches containing Aadhaar information have been reported several times, which exposes citizens’ personal and biometric data. However, with the absence of well-defined rules regarding storage and usage of data — it makes citizens susceptible to identity thefts and many other cyber crimes.

A Waste Of Resources

The cost of Aadhaar is not just financial but human waste as well. Hidden costs of the system: The hidden cost which has been borne by millions (but seems insignificant compared to the huge percolation the system is able to do) are those hours of arduous time and effort that everyone who got caught in between had to spend, trying first with various help numbers and then spending anything from a day or two with his or her arms fasting the tables.

From farmers losing days of work to visit enrollment centers to senior citizens being forced to navigate labyrinthine bureaucratic procedures, Aadhaar has placed a huge burden on the populace.

The system has also put stress on public institutions. Governments have been forced to deviate from their core duties to handle the logistical and administrative burdens of Aadhaar-linked schemes. This sort of misallocation of resources has reduced the efficiency of public service delivery, causing a domino effect of inefficiency spreading across sectors.

Technological Experiment Gone Awry

Little more than a decade after its story began, Aadhaar stands as a cautionary tale about technological overreach and mismanagement.The vulnerabilities illustrated by the case of Salim Matbar, the exclusionary impact on the marginalized, and the facilitation of financial fraud raise grave questions about utility.

The Aadhaar project is exactly how you do not execute a plan. The failure of its execution highlights the dangers of pursuing technological solutions without first addressing the systemic issues they aim to resolve. As our nation continues to expand its digital infrastructure, the government must learn from Aadhaar’s mistakes.

While we agree that reforms are needed, first the governemnt needs to improve the security systems across departments, enhance the inclusivity of projects, and ensure that whatever project they invest in, delivers on its original promise, because the money that the governemnt is spending on these services is not their own, it is the hard-earned money of the citizens of the nation and they have no right to waste it on projects that do not even deliver.

Without these changes, the concept risks being remembered not as a transformative initiative but as a costly experiment that failed to deliver.

While we already know the truth of Aadhaar, we are waiting to see how the government will implement its very ambitious PAN 2.0. We will keep you updated if it’s a hit or a miss yet again!