The next time you want to open a new bank account, forget the heavy load of documents that one has to take along. An ‘Aadhaar’ number is all that you will need…

A recent notification issued by the Finance Ministry has recognised Aadhaar number issued by the Unique Identification Authority of India (UIDAI) as an “officially valid document” to satisfy the Know Your Customer (KYC) norms for opening bank accounts, a statement released by the Authority said.

This notification is expected to promote the financial inclusion of the poor and the hitherto excluded by making it possible for them to easily establish their identity and open bank accounts, it said.

The UIDAI is facilitating opening of bank accounts for the residents at the time of enrollment for Aadhaar through partner banks and acceptance of Aadhaar as a valid KYC will make the process seamless.

Official sources said the move by the government will give a big boost to the popularity of the ‘Aadhaar’ project and will also enable those outside the banking arena to have an account of their own. The process has already been implemented in some of the banks. The new forms for opening an account will have a column for writing in the unique number.

A 12-digit exclusive number ‘Aadhaar’ is being issued by the government to act as an unique identification for citizens which is linked to the resident’s demographic and biometric information.

They can utilise the number for identification purpose anywhere in India and access a host of benefits and services.

Customers will now be able to transfer money from their accounts to any other account in the country using their cellphones, through the National Payment Corporation of India‘s Inter-bank Mobile Payment Service (IMPS).

The facility allows transactions without the need for a computer or an Internet-enabled phone.

Experts say the service introduces a new form of customer-friendliness that a developing ICT nation like India requires. The Telecom Regulatory Authority of India records more than 670 million registered mobile subscribers; with the penetration of Internet technologies through mobile phones being higher than the spread of the Internet through broadband connections, the service, they reckon, is expected to boost banking transactions better than Internet banking.

“Though the Internet banking services are user-friendly, they are actually restricted to a limited number of tech-savvy, English-speaking Internet users in the country. With the IMPS, the mobile phone, which is ubiquitous, becomes a handier device for the average user,” says Nishant Shah, director (research), Centre for Internet and Security.

The service provides an inter-operable infrastructure for banks to offer a real-time money transfer facility to customers through mobile phones in seven seconds, says A.P. Hota, CEO and Managing Director of the NPCI. The mobile fund transfers offered by banks and technology providers take 24 hours, and are allowed only if the sender and the receiver hold accounts in the same bank, a hiccup the IMPS seeks to overcome.

With mobile phone-based applications popular and more inclusive in their reach, Mr. Shah says, it might be not only more far-reaching to have banking services available through encrypted SMS systems, because it is a medium that people are familiar with, but also the application-based systems are going to benefit a lot of people, especially who live in areas with inadequate access to banking systems.

Citing South Africa and the Philippines where the IMPS has been successfully launched, experts say the banking and telecom sectors are equipped with the latest security measures for launching the service. With most banks now using a Java-based robust system which works on some kinds of phones and is supported by a various operating systems, the system is said to have tried-and-tested security features with double layers of encryption. Hence, the responsibility of caution is more on the side of the user than on technology, experts say, citing cases of sharing of passwords, leaving phones unlocked and sharing of sensitive information with strangers as causes for financial crimes online.

Seven banks have already been offering the IMPS. Seven more are linking up through this network. Gradually, all 50 banks licensed by the RBI are expected to offer the service, which will be free of cost till March 31, 2011.

When a dauntingly technical lawsuit thumped onto the tables of a small district court in Wisconsin on November 9, the global mobile phone industry sat up and took notice.

The suit, in which Spansion, a maker of flash memory chips, alleged that Samsung smartphones infringe one of its patents, was not just a local spat but the latest battle in the smartphone wars that have drawn in the industry’s biggest players.

Billions of dollars are at stake for companies including Apple, Google, BlackBerry maker RIM, Nokia and Microsoft. The legal struggle could even lead to the iPhone being banned from sale in the U.S. – if Nokia gets its way in one dispute that has gone to the International Trade Commission (ITC).

Only 28% of U.S. and European users have a smartphone that can browse the web, use email and run apps. (The biggest penetration worldwide, estimated at 40%, is in Italy.) Apple, RIM (maker of the BlackBerry) and Nokia together made $3.8bn of profit in the past quarter.

With billions of users yet to upgrade, that leaves lots of room for very profitable growth for the handset makers, carriers, advertisers – and anyone who gets paid when their patented technology is used in a handset.

For years, handset makers have licensed patents to each other so they can make interoperable products. Normally, they are licensed on “fair, reasonable and non-discriminatory” terms. But Guy Burkill at Three New Square, one of the U.K.’s leading patent barristers who specialises in telecoms-related patents, says that with worldwide sales of mobiles passing 1bn units a year, “the stakes are enormous – fractions of a penny per handset are worth fighting over.” Not every patent survives a legal challenge – a judge may strike it down because of “prior art” (someone invented it already), which makes the cases worth fighting.

Mr. Burkill said: “The sums at stake are so large that the high cost of litigation is no deterrent. That makes it difficult to foresee how it will all end.” Sony Ericsson and Nokia suggested in 2008 that the amount payable per handset should be capped at less than 10% of the handset price. But nobody could agree on how the capped fee should be divided up. So the lawsuits go on, on many fronts.

Nokia (which holds many phone patents) first sued Apple in the U.S. in October 2009, claiming violations relating to 3G networking and mobile Wi-Fi wireless. Apple responded in December claiming Nokia just wanted to force a cross-licensing deal. Nokia raised the stakes with a suit filed at the ITC, which can ban imports to the US, asking for the blocking of iPhone, iPod and Apple computer sales, claiming that “virtually all” its products infringe at least one of seven Nokia patents. Apple responded by filing against Nokia in the ITC in January.

Hearings began last week to determine whether Nokia indeed violates Apple’s patents (with ITC staff apparently siding so far with Nokia), but will probably take until June to reach a decision.

Florian Muller, a German software developer and intellectual property activist who has followed the battles, said: “I believe we will see a number of major settlements next year as some ITC complaints will approach the point at which a decision gets taken.” He warned: “Those settlements will have a profound impact on the economics of the different vendors.” For Apple, losing might be a problem – though one that could be sorted out by coughing up to Nokia.

But Google is not out of the patent woods either. Android is under severe attack, notably from Larry Ellison’s Oracle, which claims it infringes the Java patents it acquired when it bought Sun. The argument is mind-bending – as with most patents rows – but could lead to Google or handset makers (or both) being forced to pay Oracle a fee for every Android handset sold, which would be a serious problem as the platform has begun to take off in the U.S. and worldwide.

Mr. Muller thinks it means trouble: “the total cost of patent royalties that vendors will have to cough up per unit of an Android-based device will likely become substantial and could result in a cost disadvantage for Android as compared to Windows Phone, for which Microsoft provides a patent guarantee that gives vendors peace of mind and predictable licensing costs.” No date has been set for a hearing on the case.

“Since no other mechanism exists for deciding who holds the strongest hand, and nobody can agree, the courts are now being asked to rule on individual patents – a massive task, since there are so many of them,” said Mr. Burkill.

‘Law is negotiation by other means’ and to the winners will go a lot of the spoils – for years to come.

The UID project has both ‘security’ and ‘developmental’ dimensions. The former leads to an invasive state; the latter leaves us with a retreating state.

Is identity the “missing link” in India’s efforts to rise as an “inclusive” economic superpower? Can an identity-linked and technology-based solution change the face of governance in India?

Given the euphoria around the Unique Identification (UID) project, one is tempted to believe so.

However, a careful look at the project would show that the euphoria is just hyperbole; only the politically naïve can afford to ignore the far-reaching implications of this Orwellian project.

One can summarise the criticisms of the UID project under four heads…

First, the project would necessarily entail the violation of privacy and civil liberties of people.

Second, it remains unclear whether biometric technology — the cornerstone of the project – is capable of the gigantic task of de-duplication. The Unique Identification Authority of India‘s (UIDAI) “Biometrics Standards Committee” has noted that retaining biometric efficiency for a database of more than one billion persons “has not been adequately analysed” and the problem of fingerprint quality in India “has not been studied in depth”.

Third, there has been no cost-benefit analysis or feasibility report for the project till now.

Finally, the purported benefits of the project in the social sector, such as in the Public Distribution System (PDS), are largely illusive.

The problem of duplicate ration cards is often hugely exaggerated. Even so, some States have largely eliminated duplicate ration cards using “lower” technologies like hologram-enabled ration cards.

In this larger context, the UID project has two distinct political dimensions. The first dimension is that the project is fundamentally linked to “national security” concerns rather than “developmental” concerns. In fact, the marketing team of the UIDAI has always been on an overdrive to hush up the security angle, and play up the developmental angle, to render it more appealing.

The first phase of today’s UID project was initiated in 1999 by the NDA government in the wake of the Kargil War. Following the reports of the “Kargil Review Committee” in 2000, and a Group of Ministers in 2001, the NDA government decided to compulsorily register all citizens into a “National Population Register” (NPR) and issue a Multi-purpose National Identity Card (MNIC) to each citizen.

To ease this process, clauses related to individual privacy in the Citizenship Act of 1955 were weakened through an amendment in 2003. In sum, the ground work for a national ID project was completed by 2003 itself.

The parallels between the UPA’s UID and the NDA’s MNIC are too evident to be missed, even as the UPA sells UID as a purely “developmental” initiative. The former chief of the Intelligence Bureau, A.K. Doval, almost gave it away recently, when he said that UID, originally, “was intended to wash out the aliens and unauthorised people.”

But the focus appears to be shifting. Now, it is being projected as more development-oriented, lest it ruffle any feathers. The potential of the project to unleash a security frenzy is the reason why privacy concerns have to be taken seriously. The government and the UIDAI have made it appear as if the purported, and unsubstantiated, benefits of “good governance” from the project eclipse the concerns regarding privacy and civil liberties.

This is where the problem lies. A foundational understanding in the study of individual freedoms, pioneered by scholars like Amartya Sen, is that consequence-independent absolute rights are rather hard to defend. Hence, the demand to trade-off one freedom for another (here, the “invasive loss” of privacy for “development”) is an untenable demand. Each freedom, independently, has an instrumental value, and the loss of one freedom undermines the individual’s overall capability to expand up on other freedoms. No wonder then that Sen himself has voiced the privacy concern regarding the UID project.

There is a related concern: Police and security forces, if allowed access to the biometric database, could extensively use it for regular surveillance and investigative purposes, leading to a number of human rights violations. As Amartya Sen has argued elsewhere, forced disclosure and loss of privacy always entailed “the social costs of the associated programmes of investigation and policing”. According to him, “some of these investigations can be particularly nasty, treating each applicant as a potential criminal.”

The second dimension of the UID project is the following: It would qualitatively restructure the role of the state in the social sector. Contrary to claims, the UID project is not an instrument to expand India’s social security system, for whatever it is worth. Instead, the aim is to keep benefits restricted to the so-called “targeted” sections, ensure targeting with precision and thereby, limit the government’s expenditure commitments.

None other than the Prime Minister has made this amply clear. Addressing the National Development Council (NDC) on July 24, 2010, he noted: “to reduce our fiscal deficit in the coming years, … we must [be] …reducing the scale of untargeted subsidies. The operationalisation of the Unique Identification Number Scheme …provides an opportunity to target subsidies effectively.”

The UIDAI claims that UID would help the government shift from a number of indirect benefits into direct benefits. In reality, such a shift would represent the opposite: a transformation of the role of the state from a direct provider to an indirect provider.

For the UIDAI, the UID is a tool of empowerment. In reality, the UID would be an alibi for the state to leave the citizen unmarked in the market for social services. Nowhere is the illustration more telling than in the case of the PDS.

Let me state the argument upfront…

The UID project is part of a larger effort to dismantle the PDS in India. The aim is to ensure a back-door entry of food stamps in the place of PDS, and later graduate it to a cash transfer scheme, thereby completing the state’s withdrawal from the sphere of food procurement and distribution.

According to the UIDAI, the most important benefit from the UID could be that you could have a “portable” PDS. In other words, you could have a system where you (say, a migrant worker) could buy your PDS quota from anywhere in India. The claim, of course, has a deceptive appeal. One would have to dig deeper to grasp the real intent.

If we take the present fair price shop (FPS) system, each FPS has a specified number of households registered to it. The FPS stores grains only for the registered households. The FPS owner would not know how many migrants, and for what periods, would come in and demand their quota. Hence, for lack of stock, he would turn away migrant workers who demand grains. Hence, the FPS system is incompatible with the UID-linked portability of PDS.

There is only one way out: Do away with the FPS system, accredit grocery shops to sell grains, allow them to compete with each other and allow the shop owners to get the subsidy reimbursed. This is precisely what food stamps are all about; no FPS, you get food stamps worth an amount, go to any shop and buy grains (on why food stamps are deeply problematic, see Madhura Swaminathan, “Targeted Food Stamps”, The Hindu, August 3, 2004).

What is interesting is that everyone, except those enamoured by the UID glitter, appears to know this. On its part, UIDAI officially accepts that food stamps become easier to implement with the UID. So does the Planning Commission, which sees the UID as the fulcrum around which its plans to “reform” the PDS revolve. It turns out that an opposition to the dismantling of PDS, and to food stamps, also involves an opposition to the UID.

On his part, Nandan Nilekani has been showcasing his extraordinarily poor understanding of India’s developmental priorities. According to him, “in the Indira years, the slogan was garibi hatao. Then it was roti, kapda, makaan. In the last few years, it was bijli, sadak, pani.” However, these slogans are “passé”; the in-thing is the slogan “UID number, bank account, mobile phone.” Such an inverted world view, totally divorced from the grim realities of poverty, has prompted critics to call AADHAAR as just NIRAADHAAR!

In conclusion, the UID project is marked by both “security” and “developmental” dimensions. The former leads to an invasive state; the latter leaves us with a retreating state.

Either way, the “citizen” is worse off.

Come next fiscal, all taxpayers will have something to cheer about as the Union Cabinet on Thursday approved the
long-awaited Direct Taxes Code (DTC) Bill under which the government has proposed to hike the income tax exemption limit to Rs. 2 lakh from the existing base of Rs. 1.6 lakh.

The Bill, which also seeks to remove surcharge and cesses on corporate tax as a measure of providing relief to industry while simplifying taxation norms, is expected to be tabled in Parliament during the current extended monsoon session and referred to a select panel of members of both Houses for vetting.

Speaking to the media after the Cabinet meeting, Finance Minister Pranab Mukherjee indicated that the basic exemption limit for income tax is proposed to be raised to Rs. 2 lakh from the current Rs. 1.6 lakh. As for the new tax slabs, he said: “That will be discussed in Parliament.”

Although exact details are not available, indications are that an annual income of Rs. 2-5 lakh would attract a tax rate of 10 per cent while those in the Rs. 5-10 lakh category would have to pay 20 per cent and above Rs. 10 lakh at 30 per cent. As of now, senior citizens and women are likely to get some additional relief in tax slabs.

Explaining the purpose of the DTC Bill aimed at replacing the archaic Income Tax Act, 1961, Mr. Mukherjee said: “The whole objective is that a plethora of exemptions will be limited. [Income] tax slabs will be three. Rate of taxes will be taken in the schedule so that they need not be changed every year.”

India will go after any company, including Google, after cracking down on BlackBerry in its quest to keep the world’s fastest growing mobile phone market safe from militants and cyber spying, a government source said on Friday.

India has given Research In Motion(RIM.TO), the maker of the popular BlackBerry smartphone, until Aug. 31 to comply with a request to gain access to encrypted corporate email and messaging services or those services will be shut.

“Wherever there is a concern on grounds of national security the government will want access and every country has a right to lawful interference,” a senior interior security official, who declined to be identified, told Reuters.

Canadian-based Research In Motion (RIM) is under pressure from governments around the world to give access to its codes. Other companies have also faced scrutiny since authorities intensified their fight against Islamic militants misusing mobile devices.

Pakistani-based militants used mobile and satellite phones in the attacks on Mumbai in 2008, which killed 166 people. The militants were suspected of using Internet telephony, which is widely available, in the attacks.

The authorities have for more than a year been looking at Google’s(GOOG.O) messaging, Skype and other providers of communication in India. They have already forced mobile phone operators, including leading Bharti Airtel BRTI, to follow strict import rules when buying telecoms network equipment.

Chinese manufacturers Huawei Technologies and ZTE Corp0763 have been temporarily prevented from shipping network equipment for fears of embedded spyware.

“We have concerns regarding these (Google and Skype) services on grounds of national security and all those services which cannot be put to lawful interference,” the same source said.

India’s demands follow a deal with Saudi Arabia, where a source said RIM agreed to give authorities codes for BlackBerry Messenger users. The United Arab Emirates, Lebanon and Algeria also seek access. India wants access to encrypted data in a readable format, a demand RIM is resisting.

EMPTY THREATS?

How much brinkmanship this is remains to be seen. Not one country recently threatening to ban BlackBerry corporate email or messaging services has carried through with the threat.

“We don’t expect a ban actually. There will be some solution before the deadline,” said a senior official with a mobile phone operator in India, who did not want to be identified.

Officials say RIM had proposed tracking emails without sharing encryption details, but that was not enough.

The company said in a statement on Thursday that it had tried to be as cooperative as possible with governments.

India, like other countries, has been criticised for seeking blanket restrictions while mobile phone operators say they have to offer consumers privacy and secure communications.

“Obviously we support the government in its responsibility to provide security, that’s not a question,” said Rajan Mathews, Director General of Cellular Operators’ Association of India (COAI) and an industry spokesman.

“The only issue is how do we go about implementing the security objectives.”

India is also keen to retain its position as one of the world’s fastest growing IT nations. Google and Microsoft have major R&D centres in India.

Competitors have eaten into RIM’s once-dominant share of the North American smartphone market, pushing the company to look to places like India and Saudi Arabia for growth.

A shutdown would hit one million users in India out of the smartphone’s 41 million users. India is one of RIM’s fastest growing markets.

“Given that they (RIM) have got a million-plus BlackBerry subscribers. They are obviously high-end users, and they are principally data users. But you know there are alternatives. What RIM also needs to realise is people like iPhone and Nokia are alternatives,” Mathews said.

RIM, unlike rivals Nokia and Apple, operates its own network through secure servers located in Canada and other countries, such as Britain.

If a shutdown takes effect, BlackBerry users in India would only be able to use the devices for calls and Internet browsing.

Oracle Corp. said on Thursday it has filed a patent and copyright-infringement lawsuit against Google Inc.

Oracle said in a statement that Google’s Android system for mobile phones infringes on its patented Java technology.

Google spokesman Andrew Pederson said the company cannot comment because it has not yet reviewed the lawsuit.

Oracle, which makes database software and other technology, acquired the Java computer programming language and related technology when it bought Sun Microsystems. That deal that closed in January.

Java can be used as a platform for building applications for computers, websites and smart phones and other mobile devices.

In its complaint, filed with the U.S. District Court for the Northern District of California, Oracle said Google?s Android operating system software consists of Java applications and other technology. As such, it infringes on one or more parts of seven different patents ? something Google should know, Oracle argues, because it has hired former Sun Java engineers in recent years.

Oracle also said Google’s Android also infringes on Oracle’s copyrights in Java.

Oracle is seeking an injunction to stop Google from further building and distributing Android, plus higher monetary damages for wilful and deliberate infringement.

Google says about 200,000 Android-powered phones are being sold each day.

If they can’t call you, they will definitely flood your inbox with text messages.

Thanks to a commercial SMS costing less than a paisa, every sort of advertiser – from builders, insurance and investment companies, vaastu and fitness experts to sauna belt and geyser manufacturers – has turned to bulk text messages, taking the daily junk SMS count across the country past 100 million.

And that count is only set to grow further as more customers take to mobile phones: according to the Telecom Regulatory Authority of India (Trai), the number of wireless subscribers in India increased to 671.69 million by June-end from 653.92 million in May.

Conceding that the National Don’t Call Registry (NDNC) has not helped customers (though it has brought down unwanted calls), Trai, in its consultation paper on “Review of Telecom Unsolicited Commercial Communications Regulations’‘, has mooted a `National Do-Call’ (NDC) registry so that consumers can choose the kind of calls and SMSs they want to receive.

Currently, a mobile user cannot even unsubscribe or reply to a bulk SMS number. Predictably, while the Trai plan has been welcomed by consumer organizations and individual mobile users, mobile service providers, telemarketers and commercial organizations are in vehement opposition.

Despite repeated attempts, including emails, Trai secretary P K Arnold did not respond; a senior official, however, admitted that unsolicited commercial SMSs had become a menace and there was no quick-fix in sight. “Telecom companies and telemarketers have been maintaining that this mode of communication helps spread awareness among consumers and helps them reach out to potential customers. They feel a Do Call register will harm their business,” the official said. “But we are also flooded with complaints from mobile users and consumer organizations.”

The Gujarat-based Consumer Protection Association has called upon Trai to crack down on telemarketers and business entities buying bulk SMSs or leased lines from service providers at very nominal costs and texting those even on the NDNC registry. “This causes nuisance…by eating into the memory space of the handsets, resulting in non-delivery of important messages… It also burdens the telecommunication network,” it said, adding that accountability should be fixed on service providers, who are the direct beneficiary. Service providers, however, are unwilling to play ball. “Whereas every voice call costs at least 20 paise, text messages don’t cost more than one paisa to a telemarketing company. There is a need to establish a minimum price threshold for bulk SMSs,” said a senior executive of a mobile phone service provider.

Telecom players point out that there are no laws which could act as a deterrent to telemarketers against violating the NDNC registry. Some stakeholders are talking of imposing a penalty on the vendor or the company on whose behalf SMSs are triggered. A major mobile operator, in turn, has told Trai that issuing new numbers to offenders should be discouraged, at least for a minimum duration. Experts, meanwhile, say the mobile user should be empowered. The customer, they argue, should have the facility to register a complaint against a service provider violating the norms and be able to opt out from receiving such SMSs.

Last Saturday, India celebrated 150 years of the Income Tax Department in the country — a period that saw the mop-up grow from a mere Rs.1.33 crore in 1860-61 during the British rule to some Rs.380,000 crore (nearly $85 billion) last fiscal.

Finance Minister Pranab Mukherjee kicked off the celebrations here by releasing a new charter for the Income Tax Department that, he said, seeks to meet the aspirations of the people of India.

Mukherjee also recollected that the relevant bill to set up the Income Tax Department was moved July 24, 1860 by the first member-finance of the Council of India, James Wilson, who also founded The Economist magazine.

“This act was precursor to modern income tax law in the country. On this very special day, the department should rededicate itself to partnering the nation-building process through progressive tax policy, efficient and effective administration.”

The finance minister said Wilson was specifically sent to India by the British rulers to set up its tax structure, as also to introduce a new paper currency and establish a new financial system after the revolt of 1857.

He, incidentally, died a few days after the Council gave its nod for the new bill to set up the tax department. “His grave was recently rediscovered in Kolkata by an officer of the Income Tax Department and restored.”

During the celebrations a short documentary on the 150-year journey of the tax department, anchored by actor Om Puri, was also screened at the auditorium of the Federation of Indian Chambers of Commerce and Industry (Ficci).

This apart, an exhibition of paintings has also been organised to showcase the creative outpouring of officers of the department, and some celebrated artists, at the AIFACS hall here July 25-30.

Several eminent artists like Dhiraj Chowdhury, Ganesh Haloi, Prakash Karmakar, Jogen Choudhury, Wasim Kapoor and Sunil Das joined some talented artists in the department, including Bratati Mukherjee and Prasanna Kumar Dash, to showcase some 40 paintings.

Bangalore: The interim pension regulator Pension Fund Regulatory and Development Authority (PFRDA) said it will soon launch a new scheme, National Pension System (NPS)Lite, for the economically deprived sections of society which will entail an annual contribution of just Rs1,000. The scheme follows an announcement by finance minister Pranab Mukherjee in the last budget.

“We are launching the NPS Lite. It is a low-cost structure meant for addressing the pension needs for the economically deprived sections of the society. That scheme we are launching very shortly. We have kept the minimum contribution at Rs1,000 annually,” PFRDA Chairman Yogesh Agarwal said.

The NPS Lite would be a low-cost pension scheme, he said, adding the effort would be to provide some kind of security cover to the very poor people. non-governmental organizations and microfinance institutions would be engaged to ensure that the benefits of scheme reach the target group, he said.

Mukherjee in his budget speech had said the government would contribute Rs1,000 annually to each NPS account opened in 2010-11. The initiative, Swavalamban, will be available for persons who join NPS, with a minimum contribution of Rs1,000 and a maximum contribution of Rs12,000 per annum during 2010-11, he had said.

Initially, the government launched the New Pension System for Central government employees joining service from 1 January 2004, but from 1 May last year it was extended to all citizens. However, the all-citizens pension scheme received a lukewarm response and only around 8,000 subscribers joined the scheme in 14 months. In the all-citizens pension scheme, a subscriber has to make a minimum contribution of Rs6,000 annually.