India's Poor to Get $2 for Lost Wages While Getting Eye Scans for Database

Billionaire Nandan Nilekani, who heads the government agency tasked with giving Indians a unique identity number, said the country will offer $2 to its poorest to compensate them for lost wages while they get iris scans.

India’s Finance Commission has granted 30 billion rupees ($676 million) over five years to the Nilekani-headed Unique Identification Authority of India to entice the nation’s poor to sign up for the world’s largest biometric database.

“Since the poor have to forego their income and go through great inconvenience to get the number, they should get reimbursed at least 100 rupees,” Nilekani, one of the founders of Bangalore-based software developer Infosys Technologies Ltd., said at a press conference in New Delhi yesterday. He stepped down as co-chairman of Infosys in July to set up the authority.

India appointed Nilekani to set up a fraud-proof system that will help the government provide access to banking services and state benefits such as food subsidies to the poorest, who are often excluded because they can’t prove their identity. Subsidies accounted for about 13 percent of the government’s total expenditure in the year ended March 31.

The plan to set up an identity database is part of Prime Minister Manmohan Singh’s effort to increase incomes and provide benefits to more of the 456 million Indians the World Bank says live on less than $1.25 a day.

Nilekani and his family rank 721st in Forbes magazine’s list of world billionaires.

Iris Scans

The authority plans to provide the first set of numbers between August through February, said its Director General R.S. Sharma at the press conference today. The agency plans to cover at least half of India’s 1.2 billion people by the summer of 2014.

The agency decided to use iris scans in addition to fingerprints because people engaged in activities such as making local hand-rolled cigarettes called bidis have worn out fingerprints, Sharma said. The authority is in the process of hiring companies to develop software to build the database that will include names, dates of birth and iris scans, he said.

The enrollment incentive will be given only to the poorest, identified as those living below the so-called poverty line, Nilekani said.

Finance Minister Pranab Mukherjee has allocated 19 billion rupees to the authority for this financial year, which ends March 31.

India, the world’s fastest-growing major economy after China, may expand by as much as 8.25 percent in the year that began April 1, Prime Minister Singh said last week.