Aadhaar's biometric services in 'hot, humid' climate unreliable: Moody's

In a report, Moody's added that the collection of data by a centralised system increases its vulnerability and gives the least control to the users

The Aadhaar programme poses privacy and security risks, and the use of its biometric technology in humid climate is unreliable, ratings agency Moody's Investors Service said in a recent report. It added that the unique ID system often leads to "service denial".

"The Unique Identification Authority of India (UIDAI) administers Aadhaar, aiming to integrate marginalised groups and expand welfare benefits access...The system often results in service denials, and the reliability of biometric technologies, especially for manual labourers in hot, humid climates, is questionable," Moody's said in its report "Decentralised Finance and Digital Assets", according to The Hindu.

The report acknowledged that Aadhaar is the world's largest digital ID program but added that it "faces hurdles, including the burden of establishing authorisation and concerns about biometric reliability".

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Moreover, it added that data collection by a centralised system increases its vulnerability and gives the least control to the users.

"In a centralised system, a single entity such as a bank, social media platform or government electoral roll controls and manages a user's identifying credentials and their access to online resources. That entity can dispose of the user's identity data – name, address and Social Security number, for example – for internal or third-party profiling purposes," it said.

Also, it added that digital IDs can strengthen group identities and political divides, leading to negative social repercussions.

"Consolidation of control within these entities could lead to a concentration of power over individual identities, shaping perceptions and interactions in the digital realm. Further polarisation of group identities and political affiliations would undermine the goal of a united and diverse digital space," the report added.

The findings become crucial in the context of the Centre's adoption of Aadhaar for direct benefit transfer (DBT) and the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme.