Indian govt fires back at Moody’s ‘sweeping assertions’ about Aadhaar biometrics

Moody’s has faced a strong retort from the Indian government after the American credit ratings, research and data organization sharply criticized the Aadhaar biometric digital ID system in a recent report claiming it faces many shortcomings. In the report titled “Decentralized Finance and Digital Assets,” Moody’s claims that the Aadhaar biometrics system has proved unreliable in hot and humid climatic conditions especially for manual laborer's, and that the centralized data management system leaves users with no control over their data which is at high risk of criminal breaches. Aadhaar biometrics failures for manual laborers were reported in 2020, but no new information is offered by Moody’s about the frequency of unsuccessful authentication. The report further argues that while the biometric ID system was designed to facilitate access by citizens to public and private sector services by integrating marginalized and underserved groups, it has over time instead led to service denial due to many factors including biometric authentication failures. Having a centralized system like the Aadhaar could led to “internal or third-party profiling”, the report asserts, suggesting that decentralized ID (DID) options such as the self-sovereign identity (SSI) approach would give data subjects more control over their data, which would definitely reduce the risk of data hacks or interceptions. The report was written by three executives with Moody’s DeFi (decentralized finance) & Digital Assets division, and a senior research writer. Moody’s mentions a couple of countries including Estonia as examples of places where decentralized digital identity systems have been successfully implemented, with very little or no data security and privacy concerns. The report also delves into the intricacies of decentralized finance and the iris biometrics-based Worldcoin cryptocurrency project.

India says more than one billion people trust Aadhaar

Just hours after the report by Moody’s Investor Services, India’s Ministry of Electronics and IT (MeitY) rubbished the claims, arguing that it had recorded no data breach incident to date despite being a centralized ID system, The Hindu reports. The Ministry reminds Moody’s of the commendations which the Aadhaar has had from different international organizations such as the World Back and the International Monetary Fund, as well as the growing interest shown by many countries around the world in learning from India’s digital public infrastructure experience, at the core of which is the Aadhaar. Speaking about trust, MeitY says more than one billion citizens have demonstrated their trust in the system by using it to complete authentication for different government and private sector services. It says Moody’s report made “sweeping assertions” without citing any evidence against “the most trusted digital ID in the world.” “Over the last decade, over a billion Indians have expressed their trust in Aadhaar by using it to authenticate themselves over 100 billion times. To ignore such an unprecedented vote of confidence in an identity system is to imply that the users do not understand what is in their own interest,” reads a part of the MeitY statement. On Moody’s claims of biometrics being unreliable in hot and humid climates (apparently referring to fingerprint biometrics), MeitY notes that other forms of biometric authentication such as face and iris are used for Aadhaar, with one-time passwords also available in some cases. The Unique Identification Authority of India (UIDAI), which manages the Aadhaar program, also weighed in, saying Moody’s “did not make any attempt to ascertain facts regarding the issues raised by it from the Authority. The sole reference cited in the report is in respect of the Unique Identification Authority of India (UIDAI), by referring to its website. However, the report incorrectly cites the number of Aadhaars issued as 1.2 billion, although the website prominently gives the updated numbers."