The Aadhaar programme poses privacy and security risks, and the use of its biometric technology in humid climates is unreliable, ratings agency Moody’s Investors Service said in a recent report. It added that the unique ID system often leads to “service denial”.
“The Unique Identification Authority of India (UIDAI) administers Aadhaar, aiming to integrate marginalised groups and expand welfare benefits access…The system often results in service denials, and the reliability of biometric technologies, especially for manual labourers in hot, humid climates, is questionable,” Moody’s report “Decentralised Finance and Digital Assets” read.
The concerns come a year after the country’s top auditor, the Comptroller and Auditor General (CAG) of India had pulled up the Unique Identification Authority of India (UIDAI) for Aadhaar’s “deficient data management”.
However, the agency did acknowledge the fact that Aadhaar is the world’s most extensive digital identification program but went on to add that it “faces hurdles, including the burden of establishing authorisation and concerns about biometric reliability”. Data collection, especially by a centralised system, increases vulnerability and gives the least control to the users, it noted. The Aadhar programme, notably, enables access to public and private services, with verification via fingerprint or iris scans, and alternatives like One-Time Passcodes, with an aim to integrate marginalised groups and expand welfare benefits access.
“In a centralised system, a single entity such as a bank, social media platform or government electoral roll controls and manages a user’s identifying credentials and their access to online resources. That entity can dispose of the user’s identity data—name, address and Social Security number, for example—for internal or third-party profiling purposes,” the report said.
Additionally, it pointed out that digital IDs could play a role in strengthening group identities and widening political divides, leading to negative social repercussions as a result of surface-level profiling.
“Consolidation of control within these entities could lead to a concentration of power over individual identities, shaping perceptions and interactions in the digital realm.
Further polarisation of group identities and political affiliations would undermine the goal of a united and diverse digital space,” the report added. Moody’s findings are particularly crucial in the context of the Central government’s adoption of Aadhaar for direct benefit transfer (DBT) and the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme.