Much at stake for tech sector in UID project

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With the Parliamentary Standing Committee on Finance raising a red flag against the National Identification Authority of India (NIAI) Bill to grant the UID (Aadhar) project legal status, the project looks set for a slowdown. That could have broad implications for the tech sector that had laid substantial hope on it, especially when global markets are slowing down, says a Economic Times report.

The UID project is estimated to offer IT companies a Rs 150-200 billion opportunity. This includes building an ecosystem around the project, comprising biometrics, databases, smartcards, storage and system integration.

Since the UIDAI implements an open-system, plug and play approach, entrepreneurs and startups can develop applications in numerous areas. Some of the applications of Aadhar is seen in areas such as food distribution, financial inclusion, and know your customer services.

The parliamentary committee has said that the project might be too expensive and duplicates the National Population Register’s (NPR) efforts to collect biometric and other data for the national census. Some have also called for a change of collection of data from biometric data, which they consider insecure for smart cards (as fraudsters can take your fingerprints from objects that you touch). The Cabinet need not accept the committee’s recommendations.

Thus it is unclear if the UID project will be scrapped, watered down or persisted with in its current form. Some contracts have been granted to tech majors. According to the said, current contracts are not significantly large in size and their cancellation will not make a big dent in the companies’ books. He added that scrapping of project from a longer term perspective could be a negative.

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