Now there’s a growing problem in the other direction: Aadhaar is being very successfully used — by fraudsters.


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Prime Minister Narendra Modi’s model of welfare is not new to India: past leaders have also subsidized food and fuel, and given houses, toilets and paid work to the rural poor. Modi’s edge comes from technology. A year before the 2014 election, which brought him to power, the government, then led by the Congress Party, operated direct cash transfers to beneficiaries, inspired by former Brazilian President Lula da Silva’s popular Bolsa Familia program. Modi started with a modest $1 billion and turned it into a $300 billion vote magnet: and he did it with the help of 12-digit numbers.

Those numbers – and the ID cards that carry them – are known as “Aadhaar”. It is a biometrics-based system through which almost everyone in the second most populous country can prove who they are. Aadhaar, which means “foundation” in Hindi, supports more than 450 million no-frills savings accounts and has promoted the use of mobile internet for financial transactions, even in remote villages. Five years ago, Nobel Prize-winning economist Paul Romer endorsed Aadhaar as a template for the world.

Increasingly, however, it seems that there is a fair bit of epoxy putty—largely—at the foundation of Modi’s welfare program.

Fingerprinting 1.33 billion people and recording their personal information and iris scans in a central repository was no small feat. It was hoped that this ultra-expensive database would pay its cost by helping to reduce waste and prevent theft at public events. This was seen as a major advantage in a corruption-ridden country where state benefits are difficult to reach legitimate beneficiaries.

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However, activists have highlighted several incidents of denial of benefits: fingerprints fade with intense physical exertion; Fixing data-entry mistakes can be a nightmare. Those issues have largely been ignored.

Now the problem is heading in the other direction: Base Very successfully being used by fraudsters. Blame it on the ubiquity with the loose controls. While Unique ID was conceived to make welfare programs more efficient, private entities lost no time in realizing its potential. Banks and telcos used Aadhaar to conduct online “Know Your Customer” checks, drastically cutting down their cost of authenticating customers. In the process, the base became widespread and personal data began to appear for sale on the dark web.

The government’s response has been to end it all. Anything that casts doubt on the integrity of the system is ignored. This should come as no surprise: After picking one technology and making it universal, policymakers have no other way to build trust in transactions. In 2018, the Indian Supreme Court restricted the use of the database – and barred private entities from using it to verify their Know Your Customer. Yet, since then New Delhi has opened legal backdoors for the private sector to continue to exploit it.

A wake-up call about identity fraud came last month. Unique Identification Authority of India, or UIDAI, Issuing an advisory asking people not to give photocopies of their cards “as it can be misused”. Further, the notice states that only users licensed with the authority may query the database to authenticate identity; Establishments like hotels or movie theaters are not allowed when people started questioning why this warning was being issued when everyone’s Aadhaar information was already spreading everywhere, it was withdrawn the same day and This was replaced with new guidance that advised people to “exercise common sense”.

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So what is going on? Indian news website The Morning Context has given a shocking account of the recent scams. It looks like anyone can learn to clone fingerprints with Epoxy Putty on YouTube; And anyone can buy identity card online. Fingerprints can be picked up from digitized property sale deeds. Or, to steal money from bank accounts, one can hack a mobile app used by small village shops that doubles as a micro-ATM for Aadhaar-holders. The article dated May 30 said there was a six-fold increase in the total Aadhaar frauds registered with UIDAI last year. “There is no data on the full extent of welfare benefits, accounts spoofed and criminal complaints filed,” MorningContext said.

What is more disturbing than the crime is the official silence about its prevalence or seriousness. Reserve Bank of India’s recently released Payments Vision 2025 “Approves significant growth in Aadhaar-enabled Payment System (AEPS) through Business Correspondent-Assisted Model”. Over 2 billion such micro-ATM transactions took place in the last financial year. , It is Aadhaar’s $38 billion entanglement with the banking system – all on behalf of the customers at the bottom of the economic pyramid. (1) Yet the vision document of the RBI, which has “integrity” as a key pillar, has nothing to do with further strengthening of security for deposit, withdrawal and transfer services used by the poor. for the sake of saying.

Then there is the issue of social welfare: the Aadhaar payment bridge system is how the government transfers cash to the beneficiaries. There are weaknesses here too. Back in 2018, Ram Sevak Sharma, the former UIDAI chief, had made his Aadhaar number public on Twitter and challenged privacy activists: “Show me a concrete example where you can do me any harm!” As it turns out, someone managed to register Sharma as an eligible farmer and the Modi government paid him three installments of free cash. You can split hairs about whether the vulnerability was in the base or elsewhere, but the hacker proved one thing.

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Modi’s new welfare hinges on Aadhaar. But if there are cracks in the building, they need to be acknowledged – not to scare users, but to make them more aware. At the same time, India needs a strong data protection law. Losing money is bad enough. But it is scary if a bad actor can put a person in a specific place or tie him into some activity with the help of some fake transaction. Sealing wax on the foundation of trust will not work.

This story has been published without modification in text from a wire agency feed. Only the title has been changed.

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