The Aadhaar Effect

The Aadhaar Effect: Why the World’s Largest Identity Project is the story of how India built a bundle of digital platforms to bring hundreds of millions of people into the digital economy—via a national, biometric identity system, a payments interface, a consent architecture, etc.

It has kicked up intense debate on whether its impact is good or bad for the country. It is a polarised debate, with some claiming it is all good, and some others claiming it is all bad. Both sides miss the truth.
The Indian government launched the national identity project because tens of millions of Indians did not have an identity that was accepted across the country. The government lacked the capacity to provide targeted welfare and benefits to people who needed it most.

By building Aadhaar as an identity platform, a Lego block, using which government agencies can build solutions at many levels, the ambitious project aimed to address both the issues. It gave identity to every resident in the country. And it allowed governments, social enterprises and businesses to build innovative solutions on top of the platform. This Lego block approach turned out to be Aadhaar’s biggest strength—and its biggest weakness.

The story of Aadhaar is about how these blocks came to be built and how they are being used, and misused, on the ground. The narrative offers important lessons for policy makers, business leaders, tech executives, social entrepreneurs, and just about anyone who has to deal with this complex, dynamic and messy world.


What readers say:

Aadhaar is the largest and most ambitious IT project ever undertaken anywhere in the world. It has the potential to improve the lives—and compromise the privacy—of a billion people. N.S. Ramnath and Charles Assisi did an excellent job of documenting its progression. Through extensive research and interviews, they bring Aadhaar’s story to life and offer important lessons to policy makers all over the world.
~ Vivek Wadhwa, Distinguished Fellow at Harvard Law School and Carnegie Mellon University and author of The Driver in the Driverless Car

This book on Project Aadhaar is an urgent one for those in leadership roles across the world because the future is happening faster. Yet, there is no data about the future, and leaders can only imagine it. They must adapt constantly, set audacious goals in a fuzzy environment, deploy the right people, conserve resources, and use instinct as well.
~ Ram Charan, global advisor to CEOs and boards, author of numerous books, and articles in Harvard Business Review and Fortune magazine

Here’s a much-needed, clear-eyed, engaging description of the Aadhaar effect, displaying the entrepreneurial team’s chutzpah, ambition, partnership ethos, efficiency, and desire to create public goods at scale. We should celebrate Aadhaar’s numerous positives, but also embrace and deal with the flux it has triggered in society.
~ Tarun Khanna, Jorge Paulo Lemann Professor, Harvard Business School; Director, Lakshmi Mittal and Family South Asia Institute, Harvard University

India’s overwhelming human capital coexists in an underwhelming community, caged by the state. Aadhaar attempts an audacious breakout. Its outcomes, ground-breaking or otherwise, will echo. Ramnath and Charles string people, events, and ideas with scholarly storytelling. A tour de force.
~ Sanjeev Aga, former CEO of Idea Cellular and board member at leading companies and non-profits.)

As a nation rebuilt its 21st century digital DNA with Aadhaar, the world’s largest biometric database, journalists Ramnath and Assisi offer a fascinating ringside view, warts and all, of an incredible achievement that is India’s new tryst with destiny.
~ Raju Narisetti, Professor of Professional Practice, Columbia University Graduate School of Journalism

Ramnath and Charles work through a complex maze and come out with an engaging narrative. This book is a great sense-making exercise on India’s greatest information technology tool created so far.
~ Subroto Bagchi, Chairman, Odisha Skill Development Authority

The Aadhaar Effect is a thorough and provocative analysis of one of the most ambitious efforts of our time. Project Aadhaar could well serve as a blueprint for other countries getting ready for the digital economy.
~ Sangeet Paul Choudary, Member of the World Economic Forum's Council on Platforms and Systems; co-author of Platform Revolution and author of Platform Scale

The Aadhaar Effect is a lovely book. It is an “all things considered” account of the widespread changes induced in the Indian economy by Aadhaar—a biometric means for identifying every person, as well as an “all points of view are respected” explanation of the huge controversies it has generated. Very readable and very educative.
~ Arun Maira, former Member, Planning Commission of India; former Chairman, Boston Consulting Group, India

Using the Lego block as a metaphor, Charles and Ramnath bring to life the evolution of Aadhaar, from being just a technology tool to a change catalyst across governments, businesses and the social sector. Clearly, much research has gone to present the potential benefits and accompanying risks. It helps readers form an informed opinion about the most important digital project of our times.
~ Harsh Mariwala, Chairman, Marico

Two decades from now, India will be in a different league. Looking back then, Aadhaar will be seen as a marker of significant shifts in India’s journey towards creating accountability, governance and digital infrastructure. Whatever form Aadhaar takes, The Aadhaar Effect is an essential chronicle that documents the twists, turns, possibilities and pitfalls of the unique transformation a nation is witnessing.
~ Haresh Chawla, Partner, True North

Here is a critical work of research and journalism that touches on so many complex issues of the day—data, identity, privacy, consent—that will be important reading for leaders in government, technology, and business.
~ Jeff Jarvis, Director, Tow-Knight Center for Entrepreneurial Journalism at CUNY's Craig Newmark Graduate School of Journalism

I was involved with Aadhaar from Nokia when we tried to built a biometric phone. I went for the early registrations in Andhra Pradesh. I saw a 60-year-old man cry when he got his Aadhaar authentication done. When I asked him why he cried, he said “I am happy that the government knows that I exist today.” This book is a fast-paced account of the Aadhaar journey.
~ D Shivakumar, Group Executive President - Corporate Strategy, Aditya Birla Group

A truly captivating journey of a biometric identity of more than a billion people was achieved in a record time despite enormous infrastructure, social, cultural, and political headwinds! It is a story of human triumph and national pride comparable to climbing the Himalayas or landing a man on the moon.
~ Dr. Jagdish N. Sheth, Charles Kellstadt Professor of Business, Goizueta Business School, Emory University, USA


A summary of chapters

The book has seven chapters, each telling the story of different dimensions of Aadhaar and its ecosystem.

1. The Hare and the Tortoise: The chapter focuses on the organization that Nandan Nilekani, who quit his high profile job to join the government, and his team drawn from the government and the private sector created to roll out Aadhaar. Described by many as a start-up within the sarkar (government), it had the characteristics of both, start-up and sarkar. Those characteristics gave the team unbeatable advantages as well as far-reaching disadvantages. Nilekani drew strong willed people, sought out diversity and kept the organisation lean. But strong characters come with their own vision of how the world should be, diversity also breeds conflict, and people who want to cut flab, often end up losing muscles too.

2. The Art of War: The chapter explores how Nilekani took on the forces that felt threatened by the project—for good reasons and bad. As an outsider in the country’s capital, known for political intrigue and backstabbing, Nilekani had to face pushbacks on many fronts. Politicians who were worried about their constituencies, bureaucrats fighting their turf wars, businessmen trying to make sense of the implications of Aadhaar, and activists concerned about the impact of Aadhaar on the causes they were worried about. Nilekani had to dig deep into his reserves of strategies, mental models, and tools to navigate these difficulties and get things done.

3. The Platform Paradox: The chapter looks at the core, and the most interesting, feature of Aadhaar. It is a platform, a Lego block. Those who designed Aadhaar did not assume they knew the solutions. They believed that the solutions are best built by those who are closest to the problem. However, this also meant UIDAI, the agency in charge of Aadhaar, had little control on how it is used on the ground. Besides, Aadhaar is just one element in a solution. On the ground, some agencies learned to use it well, benefitting citizens. Some did not—leading to exclusion, fraud and faulty implementations. Much rides on the ability of the system to learn, correct the mistakes, evolve, and get better.

4. When a Butterfly Flaps Its Wings: If Aadhaar is one piece in a Lego construction set, this chapter tells the story of how other pieces came to be built. These include the Unified Payments Interface (UPI), eSign, eKYC, DigiLocker, and Data Empowerment and Protection Architecture (DEPA), collectively known as India Stack. Together with other infrastructure that the country is building, primarily the Goods and Services Tax Network (GSTN), they open up the doors for a digital economy—not only for the richest 200 million, but also for the poorest billion. A digital economy comes with many advantages, especially the opportunity for the people to use data to empower themselves.

5. Insurgents, Incumbents, Pioneers, and Leaders: The chapter explores how start-ups, big businesses and global leaders are exploring and experimenting with Aadhaar and India Stack. India’s business behemoths, such as Reliance and State Bank of India; technology startups such as Paytm and MoneyTap, as well as multinational corporations such as Microsoft are looking at ways to use Aadhaar and India Stack as a part of their broader digital strategies. Underlying these ambitions, plans and experimentations is the belief that “data is the new oil”.

6. The Naysayers: The chapter goes into the concerns about Aadhaar—does it lead to exclusion, fraud and disempowerment—through the stories of people who are opposed to the project. Many activists in the development sector were opposed to Aadhaar almost right from the beginning, even before a single Aadhaar number was given out. Many activists in the tech sector joined hands after a billion Indians got their Aadhaar. These two streams joined the fight, culminating in the case before the Supreme Court. Yet, at the societal level, debates around Aadhaar are marked by noise and acrimony, drowning the voices of many genuine critics and keeping several important issues off the table.

6.1 Who’s Afraid of Aadhaar? A list of over 50 concerns around Aadhaar, ranging from exclusion and privacy to the choice of technology and institutional capacity. Interestingly, both supporters and critics of Aadhaar agree on many issues.

7. India and the World. The chapter looks at how the fundamental idea of Aadhaar has evolved into Societal Platforms. These are the digital Lego blocks that can be used for social transformation, for example, by educating millions of students. It also explores how digital public infrastructure can be used to build India’s soft power.

Epilogue summarises the key learnings from Aadhaar

  1. The world is getting messier by the nanosecond, and leaders need to figure out how to operate in it.
  2. Great ambition attracts great opposition. Leaders have to pick battles wisely.
  3. Policy making is difficult; exponential growth in technology has made it more so.
  4. Technology is essential to solve problems, but a system’s capacity to absorb it and its intent to solve a problem matter much more.
  5. Activism is necessary; but ‘echo chamber activism’ can undermine the larger cause.
  6. Society must embrace technology and educate itself about the risks involved.
  7. Systems evolve through an act–learn–act cycle.


A personal note
Charles Assisi and I worked on this book project for over two years, with a lot of help from our team at Founding Fuel.

For me it was a crash course on how government, businesses and social sector work, and how technology can impact society at large. It also taught me important lessons on how human beings - as individuals and as groups - behave. Personally, I consider these insights into human behaviour the most valuable takeaway from the project. The proper study of mankind is, indeed, man.

I feel grateful to each and everyone who spent time talking to us on the project. After all the reporting and writing and rewriting, and after seeing the 'big picture', as it were, I might disagree with some of them. But, I also know that it's with only their help that I managed to get my perspective.

My special thanks goes to Mr Arun Maira, for the time he spent with Charles and me, pushing us to take a systems perspective on the project. I read most of Mr Maira's books during this period, and they all dealt with the same themes that underlined the debates around Aadhaar.

The most important teacher, I would say, is the very process of writing the book. And one can learn a lot from writing when it's overseen and guided (and pushed back) by people like Indrajit Gupta and Sveta Basraon, and my colleagues at FF.

You can follow my posts on the book by following the label 'Aadhaar Effect'.


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