Letter to CAG seeking audit of UID, NPR related projects like unified payment infrastructure


Shri Vinod Rai

Comptroller & Auditor General (CAG) of India

Government of India

New Delhi

Date: September 30, 2012

Subject- Seeking audit of implementation of UID/Aadhaar/NPR related projects like unified payment infrastructure without any constitutional, legal and historical basis


This is with reference to the Statement of Prime Minister’s Office dated September 28, 2012 titled ‘PM sets up the Architecture for Cash Transfers – Thrust to improve targeting & reduce wastage & leakages and increase transparency’ based on UID/Aadhaar is without legal mandate and is against the interest of the citizens. It is unfolding on the basis of an illegitimate subordinate legislation. This is in continuation of previous letters copied to you in this regard.

I am writing to as a citizen of India. I had appeared before the Parliamentary Committee (PSC) on Finance on National Identification Authority of India Bill, 2010 (UID/Aadhaar Bill) to give my submission.

I submit that the idea ‘to move to a completely electronic Cash Transfer System for the entire population’ is fraught with dangerous consequences.

I submit that the setting up of the architecture for moving to electronic Cash Transfers leveraging UID/Aadhaar by Prime Minister is in contempt of Parliament.

I submit that this a Architecture for Cash Transfers as the coordination mechanism consisting of National Ministerial Committee, National Executive Committee of Secretaries of all concerned Ministries, Implementation Mission and Committees with sub-committees on Cash Transfer Mission – Technology Committee, Cash Transfer Mission – Financial Inclusion Committee and Cash Transfer Mission – Electronic Benefit Transfer (EBT) Committees for helping “million of beneficiaries” is based on illegal UID/Aadhaar.

I submit that Planning Commission’s UID/Aadhaar which is “now covering 20 crore people” and its plan to cover 60 crores does not have any legislative mandate. The arbitrariness with which rest of 61 crore of Indian citizens have been assigned to the National Population Register (NPR) of Union Ministry of Home Affairs with a claim “to move to a system of transferring cash benefits directly to the poor” in programs such as NREGA Wages, Scholarships, Pensions, Income support of other types and Health Benefits. Electronic Transfer of Benefits (ETB) is an exercise in sophistry. It is a “movement from a paper based, cash driven system to an electronic direct transfer system” without any democratic consent of the citizens. Even NPR is unfolding on the basis of an illegitimate subordinate legislation under Citizenship Act, 1955 and in violation of Census Act, 1948.

I submit that cash systems pose unique risks. These include including questions about security, the ability to safeguard users’ privacy, susceptibility to counterfeiting, and suitability as a medium for online fraud.  While traditional monetary systems combat fraud by using closed networks that block unauthorized access to the system, the open networks along which e-cash payments are transmitted often lack adequate safeguards against fraudulent access.

I submit that most e-cash systems track users’ purchases. It fails to protect their privacy.

I submit that electronic payment systems come in many forms including digital checks, debit cards, credit cards, and stored value cards. The usual security features for such systems are privacy (protection from eavesdropping), authenticity (provides user identification and message integrity), and no repudiation (prevention of later denying having performed a transaction).

I submit that the results of “pilots under implementation, including in AP, Chhattisgarh, Punjab, Rajasthan, TN, WB, Karnataka, Puducherry and Sikkim” must be audited by CAG till then its further implementation should be stopped. 

I submit that the presumption that UID/Aadhaar-Enabled E-payment system would help not only in ensuring the timely payments directly to the intended beneficiaries but would also help in reducing the time taken, transaction costs and the leakages among others does not have any cogent basis. The report of the Task Force on Aaadhar-Enabled Unified Payment Infrastructure presented to Union Finance Ministry by Shri Nandan Nilekan, Chairman UIDAI and the Task Force February 23, 2012 to pilot projects implemented in the areas of LPG, kerosene, fertilizers and MGNREGS. These merit audit by CAG as well.

I submit that Shri Nilekani’s proposal for “a strategic transformation of the governance” using “electronic payments across the board” and a “systematic platform based approach for the electronic payments” is an invitation to make law making agencies redundant. This merits careful examination by the Public Accounts Committee and legislatures before its implementation can be considered.  

I submit that the Task Force’s recommendations that over a period of time, all payments of Government over the sum of Rs.1,000 should be made or received electronically appears unacceptable and merits examination.

I wish to dispute the contention of Shri Nilekani that “Transacting all Government business using electronic payments will help reduce graft, and bring about greater transparency and accountability.” The recommendation for adoption of Government e-Payments Gateway (CGA) for enabling straight-through processing and release of funds from Ministry of Finance to the Line Ministries, UID/Aadhaar account opening and authentication platform (UIDAI) to provide electronic account opening capability along with real-time authentication of residents, Aadhaar Payments Bridge (NPCI)for creating an interoperable system operated by NPCI for transferring funds into accounts at banks and post offices on the basis of Aadhaar number, MicroATM network (Banks and India Post) as an interoperable network of Business Correspondents deploying MicroATMs for balance query, deposits, withdrawals, and remittances; and Mobile banking to provide self-service banking capabilities through mobile phones for everyone cannot and should not be implemented before it is rigorously examined by a high powered independent trans-disciplinary team.

I submit that in the light of the Statement of concern on Unique Identity (UID) number by 17 eminent citizens like Justice VR Krishna Iyer and the recommendations of the Parliamentary Committee (PSC) on Finance on National Identification Authority of India Bill, 2010 (UID Bill) which has already been submitted to the Parliament, Prime Minister’s proposal based on Shri Nilekani’s numerous reports as chairmen of numerous committees and Task Forces makes one recollect what George Orwell’s book 1984 taught us about an all-knowing corrupt government creating a terrifying situation. In recent times the wide spread use of biometrics based identification initiatives like UID/Aadhaar is attributed to its endorsement by George Bush on May 14, 2002 for use in the US government.

I submit that the proposed databases and architectures are building the structural basis being laid out for future authoritarianism by providing a unique identification (UID) number to all the Indian residents. It is claimed that this UID Number “scheme shall ensure that various development deliverables reach the poor and needy in time, shall enable better monitoring and help plug leakages.” This claim of chairperson of Unique Identification Authority of India (UIDAI) is suspect. 

I submit that democratic mandate is against projects like UID and related initiatives like National Population Register (NPR), National Intelligence Grid, Human DNA Profiling, National Counter Terrorism Centre (NCTC), Land Titling Bill, 2011 and Public Information Infrastructure and Innovations.

In its report to the Parliament, the Parliamentary Standing Committee (PSC) on Finance has taken on board studies done in the UK on the identity scheme that was begun and later withdrawn in May 2010 when the proponents of ID project were defeated in the elections. The Committee took note of the problems like “(a) huge cost involved and possible cost overruns; (b) too complex; (c) untested, unreliable and unsafe technology; (d) possibility of risk to the safety and security of citizens; and (e) requirement of high standard security measures, which would result in escalating the estimated operational costs” in undertaking such projects.

The fact is becoming clearer that UID Number scheme is a naked declaration of war on civil liberties and natural resources like land. Shri Nilekani, chairperson, UIDAI  refers to Hernando de Soto’s book ‘The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else’ in his book Imagining India to argue that national ID system would be a big step for land markets to facilitate right to property and undoing of abolition of right to property in 1978 in order to bring down poverty!

In nutshell, this is the real aim of the solution architectures being advanced. Creating a common land market is co-terminus with creating a common water market. The real aim appears to be commodification and financialization of natural resources which can be made hostage to the whims and fancies of a global banking system, that in turn can be frozen as and when giant bankers or the countries that own them get annoyed.    

I submit that Parliamentary Committee has noted that the Central Government has “admitted that (a) no committee has been constituted to study the financial implications of the UID scheme; and (b) comparative costs of the aadhaar number and various existing ID documents are also not available.” In view of such glaring omissions, the Parliamentary Committee denounced the UID/aadhaar project as `unethical and violative of Parliament’s prerogatives’ and as akin to an ordinance when the Parliament is in session. The PSC comprised of members from several political parties. This is true about the all the recommendations of the committees and task forces that Shri Nilekani has headed so far and list is getting longer with each passing day.

It may be noted that Supreme Court of Republic of the Philippines July 23, 1998 rejected the National ID program initiated by President Fidel V. Ramos on December 12, 1996 through “Adoption of a National Computerized Identification Reference System” in its 60 page judgment on two important constitutional grounds, viz: one, it is a usurpation of the power of Congress to legislate, and two, it impermissibly intrudes on our citizenry’s protected zone of privacy. In India, High Courts of Madras and Mumbai are seized with the matter.

The fact is creation of Centralized Identities Data Register (CIDR) of UID/Aadhaar is creating a bullying Database and Surveillance State through its ‘black box’.

In a related development, the unanimous decision of 17 judges the European Court of Human Rights (ECHR) about violation of the right to privacy and family life by biometric profile retention in criminal justice databanks, they found that the “blanket and indiscriminate nature” of the power of retention of the fingerprints, cellular samples, and DNA profiles of persons suspected but not convicted of offenses, failed to strike a fair balance between competing public and private interests and ruled that the United Kingdom had “overstepped any acceptable margin of appreciation” in this regard. This decision is relevant for UID, National Population Register (NPR), Human DNA Profiling and voice print through Radio Frequency Identification (RFID).   The decision of the European Court of Human Rights (ECHR) decision about violation of the right to privacy and family life by DNA profile retention in criminal justice databanks merits attention. The case in ECHR was heard publicly on February 27, 2008, and the unanimous decision was delivered on December 4, 2008.

Among many questions that have emerged, one is: Has Shri Nilekani, in rank of the Cabinet Minister taken the oath on Constitution of India to abide by its provisions? While he is mutilating the rights of citizens and right to information, PDS, Mahatma Gandhi National Rural Employment Guarantee Act etc through his marketing gimmicks about the wonders of UID Number scheme, the fact is that even Mahatma Gandhi opposed a law similar to UID as a Black Act in South Africa from 1906 to 1914 saying,“…I have never known legislation of this nature being directed against free men in any part of the world. I know that indentured Indians in Natal are subject to a drastic system of passes, but these poor fellows can hardly be classed as free men” and “…giving of finger prints, required by the Ordinance, was quite a novelty in South Africa. With a view to seeing some literature on the subject, I read a volume on finger impressions by Mr. Henry, a police officer, from which I gathered that finger prints were required by law only from criminals. 

I submit that in August 1906 the Asiatic Law Amendment Ordinance became law in the Transvaal. Any Indian who did not register by a certain date would no longer be allowed to stay in the Transvaal. This law stated that every Indian man, woman or child older than 8 years must register with a government official called the registrar of Asiatics. This registrar was to also take the fingerprints of the people he registered and issue them with registration certificates, which they had to show to any policeman who asked to see them. It is noteworthy that UID scheme too is based on biometric data like finger prints and iris scan.

I submit that surveillance is a “shameful act” of supervising and imposing discipline on a subject through a hierarchized system of policing. This design is a “generalized model of functioning and a way of defining power relations in terms of the everyday lives of men.” In the initiatives like NPR and CIDR the subject is seen but he/she does not see. He/she is the object of information, but never a subject in communication.

I submit that NPR and CIDR of UID/Aadhaar as databases are meant to ensure real time tracking and profiling of citizens and turning them into subjects and creating a slave like situation.

The tumultuous colonial history of the technologies associated with surveillance reveal that the origins of surveillance happened during free trade of slaves. The proposed financial surveillance by the Prime Minister of a minority government through ‘Unified Payment Infrastructure’ seems to be part of the same colonial legacy, which he chose to appreciate instead of denouncing it.  

I submit that both NPR and CIDR treat Indian citizens worse than slaves. Citizens are being identified prior to any act of omission and commission.  It is a case of a deepening of everyday surveillance. Both are similar to what was done under the Britain’s Habitual Criminals Act of 1869 required police to keep an “Alphabetical Registry” and cross-referenced “Distinctive Marks Registry.  

I submit that the idea of using dactyloscopy, or fingerprinting, for criminal identification surfaced in a letter to the publication Nature, from a Henry Faulds, a British physician which was deployed by colonial masters in India after First War of India’s Independence in 1857.

I submit that the biometric information based identification exercise is being implemented under the influence of transnational companies like Safarn Group of France and Accenture of USA. It appears that corporate funding to the ruling political parties is facilitating the decision regarding NPR and CIDR. It merits thorough parliamentary probe.

I submit that unlike the earlier attempts the Database of Union Ministry of Home Affairs and Planning Commission that registers the names and distinctive marks builds on the biometric information of the human body that was used for tracking the misdeeds of the criminals and for identifying prisoners. This is an act of political record keeping. It is an act of using human body as data.

I submit that the proposed convergence of biometric information with financial and personal data such as residence, employment, and medical history heralds the beginning of the demolition of one of the most important firewalls in the structure of privacy. This mandatory ID (under NPR and CIDR) in every context acts not as a “unique personal identifier”. This identifier is to everyday surveillance as the discovery of longitude was to navigation.

If a technology defines a situation as real, it is real in its consequences.  The personal information is a growing commodity. Our personal information is a valued resource. According to the Canadian Internet Policy and Public Interest Clinic, “once a biometric identifier is compromised, it stays compromised”.

I wish to seek your attention towards ‘Perceptions of Privacy and the Consequences of Apathy‘ (published in Dalhousie Journal of Interdisciplinary Management – Volume 4 – Spring 2009 3), wherein Sir Ken Macdonald, the Director of Public Prosecutions in Great Britain is quoted as warning that the penalties of adopting a “Big Brother surveillance state could lead to serious consequences and suggests that “we should take very great care to imagine the world we are creating before we build it. We might end up living with something we cannot bear”.

I submit that Biometrics “means the technologies that measure and analyse human body characteristics, such as ’fingerprints’, ’eye retinas and irises’, ’voice patterns’, “facial patterns’, ’hand measurements’ and ’DNA’ for authentication purposes” as per Information Technology (Reasonable security practices and procedures and sensitive personal data or information) Rules, 2011 under section 87 read with section 43A of Information Technology Act, 2000.

I submit that National Defense Magazine, a US publication in an article entitled “Defense Department Under Pressure to Share Biometric Data” reveals that the United States has bi-lateral agreements with other nations aimed at sharing biometric data. It reads: “Miller [a consultant to the Office of Homeland Defense and America’s security affairs] said the United States has bi-lateral agreements to share biometric data with about 25 countries. Every time a foreign leader has visited Washington during the last few years, the State Department has made sure they sign such an agreement.”


It appears that NPR and UID/Aahaar and related architectures are unfolding under such agreement.  The collection of biometric data supports the ideology of biological determinism with its implicit and explicit faith in the biometric technologies. There are dangers of trusting such technological advances for determining social policies.

In the face of such attack on financial sovereignty of the country and its citizen, CAG ought to audit all the projects which are related to UID/Aadhaar and NPR to get to the bottom of the emerging regime of convergence under the persuasion of financial institutions of all hues.

Thanking You  

Yours faithfully   

Gopal Krishna

Citizens Forum for Civil Liberties (CFCL)

New Delhi

Mb: 08002263335, 09818089660

E-mail: krishna1715@gmail.com


Chairman, Public Accounts Committee

Chairman, Parliamentary Standing Committee on Finance    

Vice President of India & Chairman, Rajya Sabha

Speaker, Lok Sabha, New Delhi

Members of Parliament

Secretary to the President of India
Chief Minister, Government of Bihar
Chief Minister, Government of Tripura
Chief Minister, Government of Uttar Pradesh
Chief Minister, Government of Tamil Nadu
Chief Minister, Government of Punjab
Chief Minister, Government of Goa
Chief Minister, Government of West Bengal
Chief Minister, Government of Madhya Pradesh
Chief Minister, Government of Odisha
Chief Minister, Government of Jharkhand
Chief Election Commissioner, Election Commission of India
Chairman, Parliamentary Standing Committee on Home Affairs
Chairman, Parliamentary Standing Committee on Personnel, Public Grievances, Law & Justice
Chairman, Parliamentary Standing Committee on Defence
Chairman, Parliamentary Standing Committee on External Affairs
Chairman, Parliamentary Standing Committee on Agriculture
Lt Governor, Government of National Capital Territory of Delhi
Chief Secretary, Government of Andhra Pradesh
Chief Secretary, Government of Bihar
Chief Secretary, Government of Chattisgarh
Chief Secretary, Government of Goa
Chief Secretary, Government of Gujarat
Chief Secretary, Government of Haryana,
Chief Secretary, Government of Himachal Pradesh
Chief Secretary, Government of Jammu and Kashmir
Chief Secretary, Government of Jharkhand
Chief Secretary, Government of Karnataka
Chief Secretary, Government of Kerala
Chief Secretary, Government of Madhya Pradesh
Chief Secretary, Government of Maharashtra
Chief Secretary, Government of Odisha
Chief Secretary, Government of Punjab
Chief Secretary, Government of Rajasthan
Chief Secretary, Government of Tamil Nadu
Chief Secretary, Government of Uttar Pradesh
Chief Secretary, Government of Uttarakhand
Chief Secretary, Government of West Bengal
Chief Secretary, Government of Puducherry
Chief Secretary, Government of Arunachal Pradesh
Chief Secretary, Government of Assam
Chief Secretary, Government of Manipur
Chief Secretary, Government of Meghalaya
Chief Secretary, Government of Mizoram
Chief Secretary, Government of Nagaland
Chief Secretary, Government of Sikkim
Chief Secretary, Government of Tripura
Chief Secretary, Government of Andaman and Nicobar (UT)
Administrator, Government of Dadra and Nagar Haveli (UT)
Administrator, Government of Daman and Diu (UT)
Administrator, Government of Lakshadweep (UT)

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