India has issued 9.5 million digital identity numbers

India has issued digital identities to about 9.5 million people so far, and plans to step up enrollment to 1 million a day from October, the head of the agency issuing the biometric identities said on Thursday at a conference in Bangalore.

The digital identities, called Unique Identity (UID) or Aadhaar numbers, will provide proof of identity to the large number of poor Indians who do not have house addresses, school certificates, birth certificates or other documents that are usually used to prove identity in India, said Nandan Nilekani, chairman of the Unique Identification Authority of India (UIDAI).

The Aadhaar number gives Indian residents an online identity on a database that can be accessed from any location through the Internet or from a mobile phone, Nilekani said.

A large number of government and other organizations have accepted the Aadhaar number as a proof of identity, which could potentially extend banking and other services to more people, he added. The unique identity is also being promoted as a way to provide targeted welfare services for India's poor.

India's Ministry of Finance recognized in December the Aadhaar number as an officially valid identification to satisfy the Know Your Customer (KYC) norms for opening bank accounts.

The government is increasingly insisting on KYC compliance from banks, financial institutions and telecommunications services providers to put a curb on tax defaulters and prevent terrorists from misusing the telecommunications network.

The acceptance of the Aadhaar number as an identity proof for KYC will remove barriers to access for India's marginalized people to a variety of services like gas connections and bank accounts, Nilekani said.

The creation of a database of information on people for the Aadhaar project has however been criticized by privacy groups and NGOs (nongovernment organizations) that argue that the personal information could be misused by the government.

The UIDAI has said that it will not collect very detailed information, not even citizenship information, from people enrolling in the system. "The [Aadhaar] number will prove only identity and not citizenship," the government said in Parliament earlier this year.

But that may also turn out to be a problem, according to analysts and some politicians. Illegal migrants from neighboring countries like Bangladesh could enroll for an Aadhaar number, and take advantage of welfare programs. If on the other hand, Aadhaar is just one of many identity proofs and documents required to get services, then its value for the poor may get undermined, an analyst said.

The IT industry expects large opportunities for providing hardware, IT services, and call center services for the Aadhaar project. Nilekani also expects a variety of applications to be developed around the UIDAI identity management and verification platform.

The Aadhaar projects aims to issue identity numbers to 600 million people over the next three years or so, Nilekani said. Enrollment is currently voluntary.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com