(By Preethi J & Nikhil Pahwa)

Six years after the Indian Citizenship Act was amended to issue a national identity card to every citizen in the country, the government has constitued a Unique Identification Authority of India (UIDAI) to launch and run the scheme. In 2006, Section 14A was added to the Citizenship Act of 1955 to issue a national identity card to every citizen of the country. Yesterday, the Cabinet approved the creation of the post of Chairperson of the UIDAI, and the Prime Minister approved the appointment of Nandan Nilekani of Infosys as Chairperson, in the rank of Cabinet Minister. Nilekani will step down from the board of Infosys in July, and assume charge of the UIDAI, he told CNBC-TV18.

Pilots have been attempted, but no large scale implementation has taken place. The project was initiated to keep out illegal immigrants – West Bengal, which is home to many Bangladeshis, is one of nine states along with four Union Territories selected for the first stage of roll outs. Rs. 1 billion will be spent on the project, which is expected to be completed by early next year, Business Standard reports.

Need For A Single ID?

The National ID will be similar to a Social Security Number in the US; at present, multiple IDs are in use in India – ration card, drivers license, passport, voters ID card, PAN card for taxpayers. There have been several instances of both fake ID cards being used by terrorists and criminals, that have been used for procuring mobile phone connections etc. During the recent general elections in India, there were reports of Voter ID cards with mistakes as well. The problem is this – no single ID is comprehensive, and each relies on another form of verification. There is a need for consolidating all of these into a single ID. At the same time, the government needs to ensure that these IDs are not replicable (protection of identity), and access to information about individuals is limited (privacy).

Implications For Mobile Industry

One of the key issues with getting a mobile connection is the verification of the individual getting the connection. Particularly in rural areas, and with a migrant population, authentication of individuals is an issue; people may not possess any ID at all. A national ID card may not only reduce issues with getting a connection, but a smart card may also do away with verification costs for mobile operators.

E-Commerce & Payment Industry

Authentication is a vital step in e-commerce transactions and the more options there are, the easier. The biometric card will be used in a multiplicity of situations – to register for offline services such as a loan or an insurance plan, while buying a car. Travel will the first service that will be affected by the citizenship card, which can be used to validate identity at airports, checkposts and while booking tickets. Railways currently requires you to carry one of five documents if you have an e-ticket, the smart card will be added to the list.

Issues have been raised in the past about Know Your Customer norms for Cash Cards like Itz Cash and Done Cards. It’ll be interesting to see if the National ID is made mandatory for validation all payments. Banks currently offering m-commerce transactions are using tokens to increase security and may opt to include the new id card to the process.

The additional data required will only add to the process, and increase the complexity of transactions.


Various government schemes on health and education can be accessed using the smart card which will reduce cases of identity theft in the country. It could also be used as a tool for justice by keeping an up-to-date record of a person’s criminal record or fines and driving offenses, as is done in other countries. Malaysia’s MyKad smart card is also being used as a passport.