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Moody’s Report on Aadhaar

Moody’s Investors Service recently released a report titled “Decentralized Finance and Digital Assets,” which raised concerns about the reliability of Aadhaar’s biometric technologies. Aadhaar, India’s unique identification system, has been a cornerstone of digital governance and service delivery.

This topic of “Moody’s Report on Aadhaar” is important from the perspective of the UPSC IAS Examination, which falls under General Studies Portion.

Key Concerns Raised by Moody’s Report

Biometric Reliability in Hot and Humid Climates

One of the key concerns voiced in the Moody’s report is the reliability of Aadhaar’s biometric technologies in hot and humid climates. The effectiveness of biometric authentication methods, such as fingerprint scans, has been questioned under adverse weather conditions.

Frequent Service Denials

The report also mentions instances of frequent service denials attributed to issues within the Aadhaar system. These denials can disrupt access to essential public and private services linked to Aadhaar.

Aadhaar’s Role in Access

Aadhaar plays a pivotal role in providing access to various public and private services. Any concerns about its reliability have significant implications for individuals who rely on it for essential services.

Authorization and Biometric Reliability

Moody’s report underscores concerns related to establishing proper authorization and ensuring the biometric reliability of Aadhaar, which are essential aspects of the system’s functionality.

Significance of the Concerns

CAG’s Previous Concerns

The concerns raised in the Moody’s report echo previous apprehensions voiced by the Comptroller and Auditor General (CAG) regarding “deficient data management” in the Aadhaar system.

Linkage to Essential Services

Aadhaar is intricately linked to crucial welfare schemes. Some statistics highlight its extensive reach:

  • 765.30 million Indians are linked with ration cards.
  • 280 million are linked with LPG subsidies.
  • 788 million are linked with bank accounts.
  • Nearly 100% of farmers under the PM Kisan Yojna are linked with Aadhaar.

Concerns from Experts

Laavanya Tamang from LibTech India has also raised concerns about Aadhaar’s reliability, emphasizing its importance in the context of essential services.

Previous CAG Report

A CAG report from the previous year highlighted issues related to data matching and authentication within the Aadhaar system.

Government Response

Criticism of Moody’s

In response to Moody’s report, the Indian government has criticized the rating agency for not citing supporting data or research to substantiate its concerns.

Alternative Biometric Methods

The government has emphasized the use of alternative biometric methods like face and iris authentication as additional security measures.

No Breach from Aadhaar Database

The government has categorically denied any breach of data from the Aadhaar database, highlighting the system’s robustness.

Praise from International Agencies

The government has noted the praise received from international agencies like the International Monetary Fund (IMF) and the World Bank for Aadhaar’s contributions to efficient governance.

Global Interest in Digital ID Systems

India’s Aadhaar system has attracted the interest of many nations exploring the deployment of similar digital identification systems.

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