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Looking behind the Aadhaar Curtain

Written by Capria Admin
April 4, 2014

As a result of Aadhaar, India will become a hotbed for new startups and investment opportunities serving India’s low-income BoP population.

AadhaarMany would argue that Aadhaar (also known as UID or Universal Id) is one of India’s most revolutionary and impressive technological endeavors in recent history. What other technology or service has shown such impressive growth from zero to sixty crore (600 million) users in under five years? Read more about Aadhaar in general here.

Aadhaar is a program to assign a 12 digit individual identification number to all Indian citizens. Aadhaar is issued by the Unique Identification Authority of India (UIDAI), which serves as a proof of identity and address anywhere in India, is free of charge, and will be unique to an individual and will remain valid for life.

As a result of Aadhaar, we strongly believe India will be a hotbed for new startups and investment opportunities in the coming years.

The Aadhaar data process is complicated; however, we have researched and created the following graphic to diagram how the Aadhaar system works and to identify the seven stages of Aadhaar’s value chain and potential areas that may be attractive for breakout startups and opportunistic venture capitalists to investigate further:

Aadhaar Value Chain

Value Chain HD

1. Enrollment registrars / agencies

An enrollment registrar is usually a local organization that is authorized by the UIDAI to enroll and grant Aadhaar UID numbers to citizens. In most instances, a registrar is an organization or department related to the State Government or Union territory, the public sector, or one that frequently interacts directly with citizens for its business operations. Example registrars are the Rural Development Department, select insurance companies, and banks.

In addition to registrars, there are enrollment agencies that reside under the umbrella of their respective registrar. Enrollment agencies are typically considered the first stage of the Aadhaar value chain because they are the authorized outlets that collect the demographic and biometric data from the people in order to enroll them to Aadhaar. For these agencies to have continued authorization to operate as an enrollment post, they must be under empanelment by the UIDAI. As of March 2014, there are approximately 130 agencies empanelled for undertaking enrollments for the Aadhaar UID project. These ~130 agencies meet the minimum requirements for eligibility and are the only qualified agencies for citizens to receive their Aadhaar UID.

2. Enrollment devices and supporting peripherals

In order to be a working agency, every enrollment agency is required to have certified and trained employees and authorized hardware, such as laptops, computers, printers, certified biometric scanning devices for fingerprint and iris capture, and cameras for facial photos. These devices must be certified by UIDAI or another authorized organization. The agency must also ensure continued technical support by its hardware suppliers. These biometric devices and cameras are responsible for collecting the unique data required to receive an Aadhaar number. As a result, the enrollment devices and supporting peripherals are considered to be the second stage of the Aadhaar value chain.

There are approximately fourteen certified vendors that currently supply biometric iris and fingerprint scanning devices to aid all Aadhaar efforts across India. Those fourteen vendors are 4G Identity Solutions, BioEnable Technologies, BioMoRF Systems, Cross Match Technologies, Delta ID, e-Smart Systems, HCL Infosystems, Inspira Biometrics, Precision Infomatic, Safron Morpho, Smart Chip, Smart Identity Devices, Swathy Smart Card Hi-Tech, and TeraSoftware.


3. Enrollment software

Software HDThe “Aadhaar Enrolment Client” is the enrollment software that agencies and registrars utilize, which continues to be developed by UIDAI. Each software client needs to be registered with the Central Identity Data Repository (CIDR), which is the centralized database that stores all Aadhaar data. The software processes fingerprint and iris scans, facial photos, and demographic information. The scanned data along with the application form is sent to appropriate authorities for verification and final processing, which typically takes approximately three months to fully process. As a result, the enrollment software is considered the third stage of the Aadhaar value chain that works concurrently with the enrollment devices and data storage units.

Mahindra Satyam of Satyam Computer Services, a leading global consulting and IT services provider, is responsible for developing the system processes  that ensure each Aadhaar number is unique by going through the entire Aadhaar database and checking for duplicate UIDs.

4. Data storage

 UIDAI stores identities in its main database server called the Central Identity Data Repository (CIDR). Each Aadhaar number is linked to an individual’s unique biometric and demographic information. The CIDR is the largest biometric database in the world. As of April 1, 2013, it holds about 10 Petabyes of data consisting of approximately 610 million people and their 6.1 billion fingerprints scans, 1.2 billion iris scans, and 610 million facial photos. The Aadhaar program is projected to reach India’s entire population of 1.3 billion and store ~20 Petabytes of data by early 2016.

The approved vendors that are most involved in Aadhaar’s data storage are Bharti Airtel, National Informatics Centre Services, and Wipro for supplying blade servers, data storage space, and the installation and commissioning of server hardware and software. The Standardisation Testing and Quality Certification Directorate office is responsible for auditing the data within the CIDR. These vendors are considered to be the primary players in the data storage stage of the Aadhaar value chain.

5. Data management and security

The UIDAI guarantees the safety and security of the biometric data it houses. The data is encrypted to a high degree to prevent unapproved access by third parties as it is being communicated between servers and devices. “The UIDAI has taken several measures to ensure security of resident data, spanning from strong end-to-end encryption of sensitive data, use of strong PKI-2048 encryption, use of HSM appliances, physical security, access control, network security, stringent audit mechanism, 24×7 monitoring, and measures such as data partitioning and data encryption.” Surprisingly, the CIDR is not connected to any other database. The data housed in the CIDR actually never leaves the database. When any system at a Point-of-Service, such as a bank or retail outlet, requests UID validation and authentication from the Aadhaar database, the Aadhaar system does not actually send back UID data. Instead, the request is confirmed or rejected by the database, and only the confirmation or rejection is sent back to the requester. Therefore, no proprietary data leaves the database.

The vendors that are most involved in data management and security stage of the Aadhaar value chain are Mindtree, HCL Infosystems, and Tata Consultancy Services.

6. Data processing and analytics

Analytics and reporting are essential to Aadhaar’s mission and goals. It has been a core focus of Aadhaar from its inception. By processing and performing analytics on the Aadhaar data, the UIDAI is able to produce metrics that support Aahaar’s efforts and insights that the UIDAI can use to educate the public and further develop and improve the Aadhaar program.

Hadoop is the primary analytics and reporting platform that is used for the data processing and analytics stage of the Aadhaar value chain. Hadoop receives encrypted data packets from registrars and agencies and the large volume of data is supported and validated by various other vendor programs, such as MongoDB, MySQL, and RabbitMQ.


7. Aadhaar UID applications (products, services, etc.)

The potential products and services offered by new and existing companies based off of Aaadhaar UIDs are limitless. Aadhaar UID applications can augment or, in some cases, disrupt all sectors, including agriculture, communications, education, financial services, food and drink, government, healthcare / medical / pharmaceuticals, logistics, and retail. Already, we are seeing Aadhaar-based product and service innovations, primarily focused on government, communications, and financial services.

The most well-known application of Aadhaar UIDs is the Aadhaar-enabled Payment System (AePS). This system essentially allows anyone with an Aaadhaar number to go to a micro-ATM and check their balance, withdraw money, deposit cash, and transfer funds to another person with an Aadhaar number. The AePS also allows the government to send welfare electronically to beneficiaries who may not have previously had bank accounts.

Card1 HD Card2 HD

Unitus Ventures will further discuss how Aadhaar has facilitated the creation of startup and investment opportunities in a few of these sectors as well as new Aadhaar-based products and services via follow-on articles in the coming weeks.

Additional Resources


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