India's new antipoverty measure: national ID card

Rasmu is happy she moved to New Delhi, where she and her five small children live in a tarpaulin-and-cardboard shack. Back home in rural Madhya Pradesh, central India, she was unemployed; in the Indian capital she has become a road-builder, earning 2,500 rupees ($52) a month.

Besides her parents, there is one thing she misses, however, from home: the cut-price rice, wheat, and oil she was entitled to there. Like millions of migrants to India's cities, Rasmu has found her identification documents mean nothing outside her native state. The Below Poverty Line (BPL) card that once helped her children eat is now just a scrap of paper.

It is cases like this that have led India's government to introduce an ambitious new project: a new national identity card that will be issued to every one of the billion-plus population.

Unlike India's other innumerable forms of ID – from birth certificates to tax codes – the new card will be recognized everywhere in the country. It will feature biometric details that will quickly enable identity checks. It will link to a vast database, accessible by numerous government agencies. And its introduction will constitute one of the world's biggest IT projects.

Unlike most government initiatives designed to tackle poverty, the ID card scheme has won near universal approval.

"This is long overdue and much, much, much needed to improve the delivery of public services, something we have been particularly deficient at," says Surjit Bhalla, an economist.

Failures of antipoverty programs lead to skepticism

Poverty reduction is one of the big promises of Prime Minister Manmohan Singh, who returned to power for a second term in May. But antipoverty schemes are almost always greeted with skepticism here because of the vast quantities of cash that never make it to the intended recipients. While the government spends a tenth of its budget on subsidies, economists reckon more than half miss the target.

Take Mehender Kumar, a father of three who earns 3,000 rupees ($63) a month rifling through heaps of rubbish in New Delhi for plastic bottles he can sell. He says he has applied for a BPL card three times – to no avail. Yet he knows several shopkeepers, he says, who earn several times his salary and possess a BPL card.

The new ID card will make it easy to stop such fraud. "At the moment, leakage [of money intended for the poor] is around 60 percent but the ID card could bring it down to 10 percent," says Mr. Bhalla. "This represents huge savings for the government, but much more important, it means getting subsidies to the poor people who really need them."

India chooses business entrepreneur to lead program

This bold scheme will be led by Nandan Nilekani, cofounder of Infosys, one of India's biggest computer-services companies. This month he will quit Infosys to take the reins of the new Unique Identification Authority of India, a job that carries with it a rank equivalent to cabinet minister.

As well as being one of India's most famous IT entrepreneurs, Mr. Nilekani is emerging as one of its more imaginative thinkers. Last year, he published a book, "Imagining India: Ideas for the New Century," that explored many of the greatest challenges facing the country.

He is also known for having inspired the thesis of Thomas Friedman's work on globalization, "The World is Flat." The two men were in conversation when Nilekani described a fast-leveling playing field, sparking Mr. Friedman's idea.

Many observers believe that the appointment of Nilekani suggests the government is eager to exploit the skills of India's impressive business sector in improving India's less impressive public sector.

Nilekani describes the project as "very simple actually but … potentially revolutionary." He says that it could eventually have a wide range of uses, including "financial inclusion": helping the two-thirds of Indians who do not have bank accounts.

Some worry system will be abused

At a time of increased worry over terrorism within the country, it is also hoped that a national ID card will improve national security and intelligence gathering.

Linked to this is a concern that the card system could be abused. Jean Dreze, a leading development economist who broadly approves of the scheme, says he is concerned about possible misuses, "including police surveillance. People without ID are likely to be harassed."

Nilekani points out that it is yet early in the system's development and that he will work hard to "balance the benefits with the risks." He also adds that it will take some time before the system is in place.

Meanwhile, many of the people to whom the ID card system will make most difference have no idea of its existence. Salik Ram, a disabled beggar who sleeps outside one of New Delhi's biggest Hindu temples, has never possessed any form of ID.

"Why would I apply to the government for anything?" he says. "I'm a beggar. They don't want me here. I'll never set foot in a government office for anything."