Editor's Pick: Aadhaar unreliable in ‘hot, humid’ India, says rating agency

India’s Aadhaar system, which uses biometric verification like fingerprint or iris scan verification, is unreliable in the country’s hot and humid conditions, global rating major Moody’s Investor Service said in a report published last week. The report on “Decentralised Finance and Digital Assets” also flagged security concerns attached to centralised identification systems like Aadhaar, and said that ID system often results in “service denials”. “The Unique Identification Authority of India (UIDAI) administers Aadhaar, aiming to integrate marginalised groups and expand welfare benefits access…The system often results in service denials, and the reliability of biometric technologies, especially for manual labourers in hot, humid climates, is questionable,” Moody’s said in its report. Moody’s analysis is important for India since the government has routed direct benefit transfers of official welfare schemes Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) through Aadhaar-based payments. In June 2023, the central government urged State governments to ensure that the Aadhaar-based payment system (ABPS) is enabled for MNREGA scheme to avoid wage payment failure due to frequent changes in the bank account numbers of the beneficiaries. In August, the government extended its deadline for switching to ABPS for the fifth time, to December 31, 2023. “In a centralised system, a single entity such as a bank, social media platform or government electoral roll controls and manages a user’s identifying credentials and their access to online resources. That entity can dispose of the user’s identity data – name, address and Social Security number, for example – for internal or third-party profiling purposes,” the report said. Moody’s said that decentralised ID (DID) systems give users more control of their data and can reduce online fraud, but even they come with their own set of challenges. Digital IDs, decentralised or not, can create monopolistic influence of technology or social media companies that offer them, the report added. The Hindu’s Editorials Politicising exchanges: On China using sporting events to score geopolitical points Playing to the gallery: On incidents that have lowered the majesty of the institution of Parliament The Hindu’s Daily News Quiz Under the Mediation Bill, within how many days of first appearance must parties complete the mediation process? 180 240 30 356 To know the answer and to play the full quiz, click here. [logo] Editor's Pick 25 September 2023 [The Hindu logo] In the Editor's Pick newsletter, The Hindu explains why a story was important enough to be carried on the front page of today's edition of our newspaper. [Arrow] Open in browser [Mail icon] More newsletters Aadhaar unreliable in ‘hot, humid’ India: rating agency India’s [Aadhaar system]( which uses biometric verification like fingerprint or iris scan verification, is unreliable in the country’s hot and humid conditions, global rating major Moody’s Investor Service said in a report published last week. The report on “Decentralised Finance and Digital Assets” also flagged security concerns attached to centralised identification systems like Aadhaar, and said that ID system often results in “service denials”. “The Unique Identification Authority of India (UIDAI) administers Aadhaar, aiming to integrate marginalised groups and expand welfare benefits access…The system often results in service denials, and the reliability of biometric technologies, especially for manual labourers in hot, humid climates, is questionable,” Moody’s said in its report. Moody’s analysis is important for India since the government has routed direct benefit transfers of official welfare schemes Mahatma Gandhi National Rural Employment Guarantee Act ([MGNREGA]( through Aadhaar-based payments. In June 2023, the central government urged State governments to ensure that the Aadhaar-based payment system (ABPS) is enabled for MNREGA scheme to avoid wage payment failure due to frequent changes in the bank account numbers of the beneficiaries. In August, the government extended its deadline for switching to ABPS for the fifth time, to December 31, 2023. “In a centralised system, a single entity such as a bank, social media platform or government electoral roll controls and manages a user’s identifying credentials and their access to online resources. That entity can dispose of the user’s identity data – name, address and Social Security number, for example – for internal or third-party profiling purposes,” the report said. Moody’s said that decentralised ID (DID) systems give users more control of their data and can reduce online fraud, but even they come with their own set of challenges. Digital IDs, decentralised or not, can create monopolistic influence of technology or social media companies that offer them, the report added. 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