Aadhaar to be used to issue bank accounts to all Indian households

September 9, 2014 - 

In a stunning policy reversal, India’s new government is examining new ways to expand Aadhaar, including to issue bank accounts to all Indian households.

When the Bharatiya Janata Party (BJP) assumed power earlier this summer, its leader Narendra Modi had criticized the biometric citizen registry as a “political gimmick” that could not adequately address the control of migrants or national security concerns. There was a common belief that the program, which was closely associated with the Congress Party, would be scrapped.

As reported previously in BiometricUpdate.com, the Aadhaar project was sharply criticized by the Bharatiya Janata Party during the recent election campaign as a fraudulent scheme devised to financially benefit Congress politicians. After the BJP took the reins of government however, in a surprise move, it decided to retain and expand Aadhaar. In its first budget, the government allocated US$340 million for Aadhaar expansion.

This weekend, the Indian prime minister undertook a program review of the system, which is currently used to authenticate delivery of social services, including school attendance, natural gas subsidies to India’s rural poor, and direct wage payments to bank accounts.

According to government sources, as reported in the Indian press, the prime minister wants the Aadhaar project to be completed as soon as possible, so that its can be expanded to help deliver even more welfare initiatives and programs, including Modi’s new Pradhan Mantri Jan Dhan Yojana scheme.

The new program, which means “Prime Minister Scheme for People’s Wealth” aims to provide a bank account for each household in India. Financial Services Secretary G. S. Sandhu has described the scheme as an important step towards converting the Indian economy into a cashless and digital economy.

Prime Minister Modi has designated the program a “national priority” with a goal of providing financial services at affordable cost to the most disadvantaged and low-income segments of Indian society.

In order to issue new bank accounts to the poor, the national government will have to register the majority of the country’s residents. As a result, the government’s main goal will be to register nearly 30 million additional people through the Aadhaar system in Uttar Pradesh and Bihar states.

Aadhaar currently has combined enrollment of approximately 850 million people, with 630 million Aadhaar numbers now reportedly generated.

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About Rawlson King

Rawlson O’Neil King is a contributing editor at BiometricUpdate.com and is an experienced communications professional, management consultant, trade journalist and author who recently published a book about control and electronic networks and who has written numerous articles in trade publications and academic journals about smart home and building technologies. Follow him @rawlsonking2.