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Much at stake for tech sector in UID project

by Prasad Krishna last modified Dec 12, 2011 01:10 PM
With the Parliamentary Standing Committee on Finance raising a red flag against the National Identification Authority of India ( NIAI) Bill to grant the UID (or 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.

The UID project is estimated to offer IT companies a Rs 15,000-Rs 20,000-crore opportunity. This includes building an ecosystem around the project, comprising biometrics, databases, smartcards, storage and system integration.

Since the UIDAI implements an open-system, plugand-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.

Government public services initiatives like public distribution system UIDAI website, Wipro in March 2011 won a contract to supply, install, and commission hardware and software for data centres at Bangalore and NCR. MindTree in April 2010 won a contract for application software development, maintenance and support. TCS, Accenture, HP, Satyam, Intelenet Global, HCL Infosystems, Geodesic are some others that have won contracts.

Ankur Rudra, IT sector analyst at Ambit Capital, (PDS) and e-governance schemes are expected to spark off more projects requiring technology enablement.

Sunil Abraham, ED of the Centre for Internet and Society, said if changes are incorporated to the Bill, it would not necessarily be anti-technology. The organization had raised concerns about security issues around biometric data. "There might be a change in the design of the UID project, but technology will remain a critical element," he added. Siddharth Pai, MD of global sourcing advisory firm Technology Partners International (TPI) India, said that the UID project is a very critical infrastructure from a national perspective and chances of the project being scrapped are little.

He added that tech companies might experience delay in government spends and see a delay in project execution. This may lead to delays in revenue yields. IT company officials also acknowledge that there could be delays in projects which could increase costs for them. None wanted to be quoted on this issue. 

This article by Pranav Nambiar was published in the Economic Times on 12 December 2011. Sunil Abraham has been quoted in this. Read the original here

Filed under:
ASPI-CIS Partnership


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