8/6/2019 UID-Tool of Inclusive Growth

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India- Getting Ready for Next Level of Digitalization

What started as providing unique identification to every Indian is all slated to metamorphose into

one of the biggest financial inclusion exercise taken up by any country. Successful completion of this

exercise, widely known as UID project with the nick name of  Aadhaar will change the face of India.This year, Indian government is expected to spend close to Rs.1000 Billion on different welfare

schemes, but at the same time, they are wary of massive leakage in distribution of this money to the

section of people, who really intended to be reached and provided benefit out of it. The multi-

layered distribution system set up to reach such a huge population has also resulted in massive

pilferage of funds meant for poor section of the population.

According to an estimate, around 250 million Indian population holds bank account. So far, unique

identity number has been issued to 4.3 million Indian citizens and out of these people, 88% has

opened an Aadhaar bank account. If we extrapolate this number in total Indian population, then

after completion of this project, around 800-900 million people will have bank account.  Aadhaar  

envisages opening basic bank accounts, allowing money transfer from one area to other, using

mobile technology in conjunction with Aadhaar number for transaction and even direct transfer of 

subsidies to the very poor, using their unique identity number.

RBI has allowed banks to appoint a Business Correspondent for every 2000 account it acquires in

that area, which is not being directly serviced by them. Certain Co-operative societies, NBFCs that

are not taking public deposits as well as post offices can be appointed as Business Correspondent.

UIDAI is looking to cover 6,00,000 villages through 1.2 million Business Correspondents. These

Business Correspondents will work as Micro ATMs , who will go these villages with hand held POS

machines, Aadhaar identification number and collect or disburse the individuals door step. It will

usher India not only into next era of digitalization of financial system and architecture but will also

work for empowerment of poor.

This UID project will take internet into every rural pocket of the country through 4 G broadband and

mobile technology. It will also change the face and process of dissemination of information. Better

connect with technology and Aadhaar will not only make rural people financially empowered, but

better informed also. It will not only fuel the speed of growth, but help in mapping the market,

profiling the customers and taking various products and services to the doorstep of such a huge

market. This will also lead to various new communication exercises and tools to reach to these

customers. Although lack of education will be stumbling block in use of social media there, but in

due course, it is inevitable and will have its role to play.