m-Aadhaar: The Paradigm Shift

 

MAadhaar-Mobile-app.jpg
UIDAI, which is the authority established to issue Aadhaar numbers, has launched the m-Aadhaar app for mobile users that will allow users to carry unique identification profile on mobile. Users can download their Aadhaar number profile on their Android smartphones and will therefore not require hard copies of the card, wherever applicable.

It allows the user to carry their Aadhaar demographic information, i.e. name, date of birth, gender, address and the photograph linked with their Aadhaar number, on their smartphones.

In one shot UIDAI has addressed a lot of privacy concerns regarding Aadhaar. Now people don’t need to store their Aadhaar number unprotected on their devices, as the m-Aadhaar app comes with a password protection. It is not advisable to store your Aadhaar number without password protection on your mobile anyway. Also, you can conveniently lock your biometrics from your smartphone, which will give a lot of comfort to people who are worried about their biometric information being abused.

Aadhaar based e-KYC had a challenge, which many of us have faced, that the OTP SMS gets delayed by the order of minutes regularly, and for hours on occasions. Given the millions of OTPs which UIDAI serves every day, this is understandable. Now that problem is solved by the TOTP feature on the application, instead of waiting for the OTP SMS to arrive, you can just go to the application and get the TOTP and use it for e-KYC purposes.

Even with the push of Government and the digital nature of Aadhaar, people were using Aadhaar with its hard copy all the time. Now, with the m-Aadhaar application, Aadhaar has truly gone digital. Gone would be the days when people carry hard copies of their identity and address proofs.

As the smartphone penetration is all time high, with the numbers nearly reaching 400 million and an equal number becoming literate digitally; this will increase the feasibility and adaptability of Aadhaar platform. Especially in the context of the last 8 months, the acceptability of smartphone as a gateway for digital payments has opened the scope further. Now with the launch of m-Aadhaar, the services now offered will suit to the demand of the customers. These services can be directly accessed via their 12 digit Aadhaar number on just a single tap of their smartphone. We are heading towards an India where all services can be assessed and granted with a single tap.


Abhishek Ranjan is a Research and Policy Analyst to Members of Parliament (MPs) Mr. Ninong Ering and Mr. Dilip Tirkey. He is also working as a Consultant to DTSRDF and University of Chicago’s Delhi Center for Anubhav Lecture Series and is a Policy Consultant for FinTech startup Credy. Earlier, he was a LAMP Fellow and graduated in Engineering from Manipal Institute of Technology.

GST and financial services

On 1st July 2017, Hon’ble Prime Minister launched GST (Goods and Services Tax) from the Parliament of India. He lauded it as the step for the economic integration of India. This single tax reform is a new hope for our energized and growing economy. GST is about the vertical and horizontal integration of all indirect taxes in India. It will have long reaching impacts on the access to financial services which have been analyzed further.

Tax on financial services transactions such as banking transactions (credit card payments, fund transfer, ATM transactions, processing fees on loans etc.), mutual funds, insurance and the stock market has increased from the previous 15% to 18%, making them marginally costlier. It would have an inflationary impact in the near future. But many experts are hopeful that the increase in cost may not last in the long run as banks will pass on the benefit of input tax credit, under GST, to their customers. 

Picture1

Ninety percent of the products in the service sector were placed in the 18% bracket, which is a marginal increase but is expected to reduce complexity in the transaction and improve ease in availing of input credit. Out of all services, 63 have been put on a negative list, which is exempt from tax.

Mutual fund distributors earning up to Rs. 20 lakh will remain exempt from GST, while those earning more will see their tax rate increased from 15% to 18%. The hike from 15% to 18% will apply to the insurance sector as well.

In stock trading, the brokerage would have increased taxes. Depending on the volume of trades, the brokerage can be a maximum of 1% for a transaction value of Rs10,000.

As per Vinod Kothari Consultants, on the matter of loans coming under GST, they say that the definition of goods and supply under sections 2(52) and 2(102) of the CGST Act, exclude money to money transactions. Loan transactions being money to money transactions are therefore not subject to GST.

Further, the GST Council has also exempted money to money transactions in the Schedule of GST rates for services Entry 8 of the list of exempted services states. Therefore, interest charged on loan transactions shall not be subject to GST.

To conclude, with the arrival of GST, financial services transactions have become dearer but in the long run service providers will pass the benefits to consumers. We must embrace GST era with positive spirits!


Abhishek Ranjan is a Research and Policy Analyst to Members of Parliament (MPs) Mr. Ninong Ering and Mr. Dilip Tirkey. He is also working as a Consultant to DTSRDF and University of Chicago’s Delhi Center for Anubhav Lecture Series and is a Policy Consultant for FinTech startup Credy. Earlier, he was a LAMP Fellow and graduated in Engineering from Manipal Institute of Technology.