Aadhaar makes citizens more vulnerable

Last year Delhi Police busted an ISI spy ring and found that Mehmood Akhtar had an Aadhaar card naming him as Mehboob Rajput. In May this year, the Central Crime Branch found that three Pakistanis had obtained Aadhaar cards in Bengaluru through a middleman for Rs 100 each. More recently, Zeebo Asalina, an Uzbek national arrested in Orissa, had an Aadhaar card naming her as Duniya Khan.

• The perception that security agencies may have a better chance of nabbing potential terrorists if all mobile connections are verified using Aadhaar is flawed. Since Aadhaar cards were based on forged documents and UIDAI does not conduct any verification by itself, it retains the flaws of these documents and is not ‘fraud-resistant’. In fact, once they have Aadhaar, things may get easier for potential terrorists, given the incorrect perception that it is foolproof.
• Paper IDs are not good for privacy since they can be reused for other purposes. But Aadhaar is worse, because once data is shared with hundreds of third parties, it is no longer secure. 
• Electronic KYC is cheaper for telecom operators and banks, it is costlier for citizens. The cost of the loss of personal information is much higher than the benefit of collecting it. UIDAI has no control once data leaves its system via eKYC, which has a tick-box approach to consent and no checks thereafter.
• The risk of personal information leaks increases with more services getting linked to Aadhaar due to security vulnerabilities, or sheer incompetence of the government or third parties.
• Disclosure of Aadhaar numbers is illegal as per Section 29 (4) of the Aadhaar Act.
• Whereas RTI Act makes it mandatory for every public authority to publish the manner of execution of subsidy programmes, including the amounts allocated and the details of beneficiaries of such programmes. This is conflict with Aadhaar Act.
• Biometrics are the least secure form of authentication. They can be cloned from photographs, and you leave fingerprints on every glass of water you pick up.
• Estonia had to suspend its digital ID cards due to cybersecurity related vulnerabilities. Spain is facing similar issues. 
• The government’s cavalier attitude towards privacy that privacy cannot be at the cost of innovation indicates its willingness to put citizens’ personal safety at risk: that your privacy is a price that GoI is willing to pay for making it easier for businesses to be built around your data.
• Data for millions of people has already been compromised by the government, the allegation that critics are “alarmists” and “motivated” is a tactic to divert attention from badly designed architecture, execution mistakes, security failures and the yet-to be-addressed risks.
• While there are some benefits that might accrue from customisation of thousands of services that might otherwise not have had your data, a government that forcibly takes sensitive and personal information from you, and a court that has allowed this to happen despite appeals to stop it, has acted against you and 1.3 billion others.
• All your data, linked to a single ID and accessible to the government under unspecified ‘national security’ considerations, without sufficient checks and balances and judicial oversight, is also dangerous in the hands of a future government that might look to retain power by any means necessary. 
• Mass surveillance for which Aadhaar is an enabler, is an unnecessary and disproportionate infringement of rights, and dangerous for democracy. 
• With Aadhaar numbers littered all over the web, anyone can create a dossier of personal information by finding and joining datasets bases with the Aadhaar number and hence stating that Aadhaar is not a secret or confidential number is misleading and dangerous.
• Publishing a person’s caste, Aadhaar number, or mobile number or emailids is an unwarranted invasion of the privacy of the individual and serves no public interest but the leaked info can also cause financial loss. It opens doors for fraudsters to perform attacks on unsuspecting individuals.
• Publishing of last four digits of Aadhaar number only might not satisfy the provisions of both RTI and the Aadhaar Acts. Publishing Aadhaar number, full or partial, on the open web will put too many unsuspecting people at risk. It’s illegal for UIDAI to pass the buck and act innocent about data leaks. It needs to get across to users of Aadhaar data to follow the law or be held responsible.
• Instead of blaming the transparency requirements of the RTI, UIDAI must be pressurised to enforce its agreements with its partners. Whether you call it a data leak or not, doesn’t reduce the harm done if the authorities continue to publish Aadhaar details on the open web.

Government can't make citizens safer by making them more vulnerable.

The issue is not about Aadhaar as a tool in identification, but of linking it with everything under the sun is gross violation of privacy by government. While linking Aadhaar as remedy to plug leakages of government subsidies is well taken but forcefully linking it to all IDs is as imprudent as having one password for all your transactions which exponentially increases vulnerability. There would be little remedy to assaults by fraudsters on systems that are indiscriminately cross-linked. In the absence of robust data security environment, stringent privacy laws and meticulous penal agreements for any kind of data leakage or misusing, Government has no business to make Aadhaar linking mandatory to all citizen IDs and exposing them to security threats and unknown & unmitigated financial losses.

Democracy and its Perils

• Democracy is a political system which combines the elements of fairness, legitimacy and effectiveness. It is the least worst system. 
• Democracy is imperfect and, when misapplied or incorrectly interpreted, can be saddled with flaws and weaknesses. 
• Democracy is the most expensive & inefficient form of governance.
• A democracy is not a democracy unless it has independent and strong institutions that help facilitate good governance and right thinking citizens demanding accountability and transparency.
• Proper democracy is far more than a perpetual ballot process. It must include deliberation, mature independent institutions and checks and balances. It may include educated citizens, strong civil society and strong laws.
• Freedom is an essential part of democracy. Freedom is essential for both the ruled and the ruler.
• Unfettered freedom brings with it its own hazards that would undermine the institutions that help sustain democracy.
• The victim of democracy is the politics itself. Politics in a democratic set up tends to be looked upon with contempt by the people. It is much maligned and abused field in all the democracies.
• Politicians once elected to power become the custodians and abusers of power.
• Bad politics leads to corruption. As the people responsible for corruption are ‘enabled’ to loot the exchequer either by the loopholes in the laws or indifferent ‘people’ who form the very basis of democracy.
• Corruption has reached gargantuan proportions, because of the indifferent attitude of the people and enabling environment provided by democracy for the corrupt to practice their art. 
• Democracy aides both the individual and the ‘corrupt’ authority. Democracy with weak institutions gives them free hand to run the government, they tend to err, and err with impunity.
• Criminalization of politics is the biggest peril of democracy. With it comes misuse of position and authority. It inevitably leads to corruption.
• Corruption directly brings underdevelopment and spawns poverty. In India poverty is the major benefactor for the politicians. As long as poverty is sustained, they can amass wealth – always unaccounted.
• Democracy promotes capitalism which in turn results in uneven wealth distribution. Rich becomes much richer while poor remain poorer.
• Risk of capitalism is usually socialized while profits gets privatized.
• Democracy in itself is not a threat, but any weak link within it is bound to weaken the whole structure.
• Democracy has become synonymous with elections and is reduced to the process of elections.
• In democracy poor people vote, and the elected become rich at the cost of the poor. It’s a government of the rich, for the poor to sustain the poverty. This sounds cynical, but hard facts vindicate the statement. If 70% of India’s population still earns less than Rs 50 per day, even after 70 years of independence, should we compliment ourselves or introspect?
• Development has suffered more in democracy than in other forms of governments. Though it is fashionable to say that democracy is better than despotism despite lack of development, does it do justice to the vast millions who go to sleep hungry?
• Within democracy, we need a change of mindset both of the people and politicians in their attitude towards development. We are witnessing the loot of our resources by the powerful few who are covertly supported by the government machinery. Every penny that’s put to improve the lot of this country is unaccounted for. The crux is lack of accountability.
• Education of the masses and strong institutions is a solution to most problems in India.
• Institutions which are not pestered and interfered by the ruling classes perform better. The fear that these institutions if given complete autonomy would grow as a threat is unfounded. The Supreme Court of India and Election commission of India are governed by bureaucrats, not by the elected politicians. These institutions function well within the scope of our constitution.
• Our military has gained reputation for being fair to its people and the constitution. Where there is no interference by the politics, the institutions serve well. For a democracy to thrive and bring development to the masses, we need independent institutions to act as check and balances on the government.
• We need universities which are not at the mercy of government; we need public service commissions not interfered in their functioning by the government; we need a strong Lokpal to punish the corrupt; strong local governments to bring development at the bottom; independent CBI and a police force which is pro-people; the list goes on.
• These changes are not difficult to bring on. It is the will which is missing, lest it affects the power of few to amass the wealth. Perils of democracy are the result of loopholes within it. To plug them, we need to fight. Of course, non-violently.
• A blanket endorsement of it as a convenient panacea will do more harm than good.
• There are very few nations on this Earth, which openly reject the notion of democracy. Most countries espouse it, or at least offer it lip service.
• Myth #1: The people can do no wrong.  The legitimacy of majority rule with no reservations or caveats raises the issue of sub-units within the voters viz territorial, cultural, ethnic or religious. What happens if the people change their minds? Democracy cannot be just if it is not just over time. Does a coalition automatically legitimize the action of individuals or groups or nations without regard to higher principles of morality or ethics? The doctrine of popular infallibility can be kept as a useful reference point but must not be abused or overextended.
• Myth # 2: Direct  democracy is always better than representative democracy. Given the volatility of public opinion, the complexity of social psychology and the possibility of inter generational conflicts, the representative democracy is often superior to direct democracy, with the representatives acting as buffer. Mistakes can then be attributed to representatives and not to the people. The conventional assumption is that the will of the people should always trump that of the elites. The principal arguments against leaving too many decisions to the direct appreciation of the masses can be summarized as follows: (1) Uninformed or insufficiently informed electorate (2) Influence of money and media (3) People changing their mind (4) Contradictory Referenda (5) Deleterious effect on public policy.
• Myth #3: Democracy trumps all other social goals. The backlash against Dumb Democracy is the realization that democratization, although a valid goal, is not the only desirable one that a Society can legitimately aspire to. The following compete for priority with democracy. (1) Peace (2) Justice (3) Liberty & Freedom (4) Security (5) Good governance (6) Escape from extreme poverty (7) Public Vs Private goods (8) Good health (9) Traditional values (10) Climate change and sustainable development. 
• Myth #4: Democratic countries will never go to war against each other. There is a frequent assumption that once a country becomes democratic it will renounce violence, avoid going to war especially against other democracies, and try to resolve outstanding problems by peaceful means. Experience shows that the relationship between democracy and war is actually very complex and far from straightforward. 
• Myth #5: National democracy automatically leads to global democracy. Will a world composed of democratic nation-states automatically mean that it will also be democratic? This question is as complex and there are no simple answers. The UN Security Council, with coercive powers, is composed of five permanent members with veto powers who appointed themselves to that position. The other non-permanent members are elected by the UN General Assembly, but do not have veto power. The elected President of United States has real authority over the whole world by virtue of the overwhelming military power, which it has used in Iraq and threatens to do so elsewhere. There is a serious democratic deficit where 2% of the world’s voting population manages to have a determining influence on the entire world.
• There is no formula of global democracy and every formula suffer from inefficiencies and conflict of goals. The attempted simple transition from national to global democracy without a lot of preparation and adaptation is therefore destined to fail unless treated with a more sophisticated analysis.
• Other than democracy, there are no other known political alternatives which will work in the long run.  There is no permanent security in tyrants and the checks and balances of democracy make it the only sustainable political system, which can claim both long-term efficiency and legitimacy. Democracy must prevail because of mounting global interdependence requiring team responses and collective decision-making. A leader has to motivate his troops and keep their confidence. No single individual holds absolute power anymore, and everyone has to report to some group or a parliament, all leaders are accountable to some committee of peers, which makes democracy sustainable, indispensable and inevitable. 
• The modalities of this accountability have to be modulated and perfected.
• The construction of a democratic state must be gradual and well planned. It can rarely be imposed by non-democratic means. Democracy by force of arms is self-defeating. 

 In framing a government which is to be administered by men over men, the great 
difficulty lies in this: you must first enable the government to control the governed; 
and in the next place oblige it to control itself ... James Madison

The Perils of Dumb Democracy


Ambedkar described constitution as a fundamental document stated that the purpose of a constitution is not merely to create the organs of the state but to limit their authority because if no limitation was imposed upon the authority of the organs, there will be complete tyranny and complete oppression. The legislature may be free to frame any law; the executive may be free to take any decision, and the Supreme Court may be free to give any interpretation of the law. It would result in utter chaos. Constitutional morality is not a natural sentiment. It has to be cultivated. We must realise that our people have yet to learn it. Democracy in India is only a top-dressing on an Indian soil which is essentially undemocratic. Demonetisation has negated the fundamental and constitutional rights of Indians. By forcing every Indian, and not just the black marketers and counterfeiters, to stand in queues to withdraw hard earned money, our elected government has insulted all. Citizens have been temporarily deprived of property by a single fiat, even though the constitution says this can only be done with the authority of law. Countless have died, been rendered jobless, hungry and homeless. Is this a democratic act? RBI has been reduced to cipher. Fiscal policy has become political and the finance ministry redundant. The parliament and the cabinet have been turned into a mere formality. Judiciary appears seriously weakened. It is not easy for the victims of police and investigative agencies to get any relief against wrongful detentions and prosecutions. But it is the concerted attack on institution after institution by the Modi government that raises serious concerns. Bhakti in religion may be a road to the salvation of the soul. But in politics, bhakti or hero-worship is a sure road to degradation and to eventual dictatorship. India has moved away from constitutional democracy to populist democracy. Ambedkar is losing. Modi is winning.

Demonetization: A bad idea even badly implemented

In the past, the Soviet Union, North Korea and Zimbabwe and other nations also took draconian steps to retire large bills, but most were responding to crises marked by hyperinflation, and were ruled by dictators. India may be the first democracy to attempt this kind of purge in stable economic times.

Prime Minister Modi in his televised address to nation on Nov 8, 2016 announced demonetization of Rs.1000 & Rs.500 currency notes to eliminate (1) black money (2) corruption (3) fake currency and (4) Terrorists operating cross border but failed to give any justification how these complex things will be achieved by a single step with devastating effects on states revenues, agriculture, real estate, retail, informal sector, cine industry and many more effecting 850 million people very badly.

On some simple analysis it would be clear that the stated objectives i.e. four objectives will not be achieved by this step but this action has political undertones with eyes on forthcoming UP elections, then RS elections, followed by President and Vice President elections.

• Black money which is over 20% GDP ($2.25 trillion or Rs.150 lakh crores pa) amounts to Rs.30 lakh crores pa. Out of which is it is in the form of cash by only 6% of cash in circulation (Rs.17 lakh crores) and i.e. Rs.one lakh crores.
• With Rs.2000 and Rs.500 new notes replacing existing Rs.1000 & Rs.500 only black money stocked in cash gets emptied but corruption & black money generation will remain unaffected.
• Fake currency is just 0.028% of cash in circulation (Rs.17 lakh crores) i.e. 476 crores only, a minuscule component. Printing Rs.2,000 notes alone costed Rs.12,000 crores apart from logistics & exchanging expenditure. 
• Terrorist fake money mainly printed by ISI from Pakistan will only get effected and the existing stocks held in Pakistan will be effected. With respite of few months it will come back to normal state. Needless to stay 1,400 km border mostly on plains is impossible to seal. Only active vigilance can control this menace.
• Bulk of the terrorist money is routed through normal banking channels reaches sleeper cells in various cities. The demonetization have no effect on them.

Demonetization might give some instantaneous benefits - cash profits to central government due to unchanged cash (estimated at 20% i.e. Rs.3.5 lakh crores) for reducing its deficit, strengthening banks base and still have surplus cash hand during the year of demonetization. But taking into consideration significant reduction of states revenues, GDP growth reduction and its devastating effects like impact on cash sectors like agriculture, retail, informal sector, real estate, cinema industry and almost all aspects of economy and more importantly enormous difficulties faced by 30 crore people in exchanging notes and disruption of services, the losses far out weigh benefits and it is nothing but insanity to resort to this unscientific political step during stable economic times eyeing only on political benefits, which may or may not accrue. Immediate deflation followed by inflation violent volatility pushing the economy to brink of collapse, is another aspect. This is like jumping into well and committing suicide, in the name of radical measures.

Almost all the bank loans have real estate as mortgage which is over valued by at least 4 times. With real estate values plunging to below 50% mark, the willful loan defaults will increase and banks viability gets threatened.

Scrapping large currency notes may destroy some hidden wealth today, but the black economy will start regenerating itself tomorrow. Only as a nation gets less poor do corruption, black money and the role of cash decline. There is no shortcut. The least corrupt countries tend to be richest countries from Singapore (Per capita $85,382) and Norway (Per capita $68,591). They are small too 5.40 & 5.16 million. In contrast, India is country with 130 crores population, per capita income of $1,718 (Rs. 114,000), 26% illiterate, 29.5% below poverty line of Rs.32/47(Rural/Urban) etc. corruption and black money will exist in some form of other. The prudent way is to keep them under control with strict processes and vigilance.

INDIA - STATISTICS

• GDP of India is $2.25 trillion (Rs. 150 lakh crores) and per capita income of $1,718 (Rs. 114,000).
• India ranks 7th and contributes 2.65% of total world's GDP.
• India shares 17.5 percent of the total world population and 2.4 percent of the world surface area.
• Cash in circulation amounts to 12% of GDP.
• The black economy is about 20% of the formal economy.
• Tax collections amount to 16% of GDP, at least 5 points less.
• Bank deposits amount to 60% of GDP, strong for a poor country.
• India currently ranks 76th in corruption.
• Rs.1000 & Rs.500 notes constitute 86% of Rs.17 lakh crores currency in circulation.
• 20% i.e. Rs. 3.5 lakh crores is unlikely to return to banks for exchange leaving windfall to RBI & Central Government.
• Black money in the form of cash is 6% of cash in circulation i.e. Rs.1.02 lakh cores.
• 90% of transactions takes place in cash. Remaining in credit/debit cards and other modes.
• Fake currency is just 0.028% of cash in circulation of Rs.17 lakh crores is just Rs.476 crores.
• Cash stocked with naxalites extortion is of Rs.5,000 crores.
• Printing new currency alone costs Rs.12,000 crores apart from logistic and exchanging expenses.

TELANGANA SEVERELY EFFECTED

Demonetization of  Rs.500 and  Rs.1,000 currency notes, it seems to have dealt a body blow to nascent Telangana State, pushing its finances deeper into turmoil. The sectors or schemes expected to be severely affected are major and medium irrigation, Mission Kakatiya, Mission Bhagiratha, roads and buildings, housing, social welfare schemes such as Aasara pensions, Shaadi Mubarak and Kalyana Lakshmi, pre and post-matric scholarships and fees reimbursement, partial waiver of farm loans, power subsidy for farm sector, release of funds for panchayat raj and urban local bodies, interest payments and servicing of debts, etc.

The revenue will be just enough to pay salaries, allowances and pensions of government employees. Drought in the previous two years and flash floods in the current year have impacted the state's economy. Demonetization has compounded the woes.

Modinomics is literally bleeding the Telangana State red!
KCR is flabbergasted with all his next election winning strategies blasted and in rubble, apart from he, his family and his party's accumulated black money gone.


NORMALCY RESTORATION IS MORE THAN A YEAR AWAY.

Replacing Rs.500 notes, printing of which started on Nov 10, 2016 is likely to take at least 6 months with all four security printing presses going on 3 shift basis with 80% load factor. That means currency woes will ease by May 2017 only. Economy with acute shortage of cash for 6 months is likely to undergo violent volatility of deflation and inflation and collapse is not ruled out. Coming back to pre Nov 08, 2016 level is at least two years away.


ECONOMISTS IGNORED

Anil Bokil a member of the Pune-based ArthaKranti Sansthan, has propounded the concept of Artha Kranti – an economic solution designed to end the vicious cycle of corruption with specific focus on black money. It seems Prime Minister Modi granted 9 minutes and extended to 2 hours audience and and made up his mind for the proposed the demonetization of high value currency notes.

Making payment systems miserable for transactions leads to bartering or using gold as medium of exchange or a combination.  As long as corruption is a low risk and high profit activity it will flourish. Systemic modifications should result in increasing the risk and minimizing profits apart from ethical education and convincing the people that paying taxes is for their well being. Today, no Indian believes this.

It is so much easy to design variety of mathematical models ignoring people's psychology. Modi himself escalated to throne with the help of corruption money, rogue politicians and greedy businessmen. Today talking scriptures is no use. What is important is to modify system with built in incentives for tax compliance and at the same time increasing the chances of getting caught and penalized to bring corruption to unprofitable levels.


NONE TAKES RESPONSIBILITY

• In a democracy, not consulting economic institutions and legal experts and driving the nation to this type of brink of collapse is nothing but madness and committing suicide. 
• Where is the detailed plan with risks and its mitigation? 
• The procedure has been modified 13 times in 6 days of panicky management. 
• RBI Governor is hiding. 
• PM cries and invokes patriotism and begs for 50 days patience.
  Patriotism is to be invoked during emergency situations only.
  On Nov 8th situation was very much normal.
• PM evades his presence in Parliament. 
• PM announces his life is at threat but doesn't let us know why the matter is not handed over for investigation? 
• FM & others simply says people need to make short term sacrifices for long term benefits. Does they mean to say that in short term poor & peasants have to sacrifice and in long term rich, educated, rogues and loafers will garner benefits for themselves? Why no body is taking responsibility for the situation which landed 90 crores of people standing in streets under hot sun for several hours for nothing.
• Today, after 13 days of demonetization, cash and economic activity situation is totally out of control and fortunately rites haven't erupted. Despite 55 deaths, Government has not announced any mitigation steps except making some speeches of patriotism and patience and long term benefits after 2 years. 
• Poor and peasants are left to the mercy of God.
  Shamelessly they say easing would take 50 more days.

It is worthwhile to recollect how much caution Israel Prime Minister Yitzahak Rabin exercised before approving "Operation Thunderbolt" a daring military rescue operation of hijacked hostages of Air France plane and held about 100 Israeli passengers & French crew at Entebbe airport in Uganda in 1976.

On the contrary, on Nov 8, 2016 our flamboyant "chaiwala" Prime Minister Narendra Modi announced "Demonetization of Rs.500 & Rs.1000 notes" based on some body's presentation about structural changes in economy without any deep study and understanding repercussions plunged the nation into economic chaos and mitigation would require about six months and recovery is at least two years away. It is just like jumping into a well and committing suicide.

Finally, the currency is an instrument issued by RBI and Government has no role in managing that except by an Ordinance followed by an Act of Parliament. Modi announced demonetization by an executive decision which is grossly illegal and its legality will be scrutinized in courts.