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The Unique Identification Authority of India (UIDAI) project will not only provide an identity to over one billion Indians, but also create jobs for them. An estimated 3,50,000 new jobs are expected to be created as a result of the UID project, according to a report analysing its impact. The mega project is estimated to result in a commercial opportunity of $20 billion in the first five years, and from the sixth year onwards, $10 billion annually, making it one of the largest projects not only in terms of scale, but also in revenue potential.
Other than software and hardware providers, who stand to gain by providing systems and services to implement the project, telcos and banks will be big beneficiaries, according to the report by brokerage firm CLSA. Telcos stand to gain 60 million new subscribers, $4.5 billion in mobile payments, and $2 billion in ARPUs (average revenue per user) and handset sales, while banks stand to gain 125 million new bank accounts from the existing figure of 240 million unique account holders.
“An early success should kick-off a virtuous cycle, making UID numbers a catalyst for transformation in India...Can a number change a nation? We believe it can,” said Anirudha Dutta, deputy head of India Research, and his colleagues from CLSA. “In impact, the UID project is unprecedented in its ability to directly address many flaws in India’s social infrastructure at its very roots, and also in its potential to catalyse corporate-sector participation (and even innovation),” they pointed out.
“Prima facie, the inclusive agenda of the UID project will drive more business for financial institutions and telcos. The ultimate objective of the project is to have bank account for every person with a UID. As a result, a majority of the billion-strong population, even if not the entire billion, will come into the banking fold. A lot of what is now transacted through cash, will get channelised through the banking system. Telcos will benefit as the concept of mobile-wallet takes off. They are also well-placed to play the role of business correspondents for banks, since banks cannot have branches everywhere and will have to use business correspondents for reach,” said Guru Malladi, partner, Ernst & Young.
The revenue flow is expected to happen in a phased manner. Initially revenue opportunities will be for consulting, IT services, business process re-engineering (BPR), hardware and training and maintenance. In the second phase, it will be for handset makers, mobile payment services, market analytics and business intelligence services, and hardware. In the third phase, the potential revenue opportunity for targeted marketing could be in the region of $12 billion per annum, according to the report’s authors.
Each of these is expected to create more jobs in areas like systems integration, training and analytics, spurring demand for roles like systems specialists and programmers, and jobs associated around business process engineering. By the sixth year, the report projects UID-linked commerce worth $9 billion-$10 billion annually. “By Year 6 of its implementation, UID should have entered a virtuous cycle of innovation, commitment and inclusion, linking private-sector businesses to India’s poor in an unprecedented manner,” the report said.
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