Aadhar Unique ID - India's Social Security Number - A new impetus to domestic industry

The process is underway to provide the billion Indians their new identity. For those who don't know, Nandan Nilekani who was once the CEO at Infosys (who I should say I admire) has been drafted by the government to arrange this. Naturally there are all kinds of opinion about every aspect of this program and the number itself. What however I am interested is the new industry that this can create within the Indian economy.

One of the purposes of this card or the number as indicated by  the government is to send subsidies directly to people rather than subsidize the goods and services. It is like you purchase diesel and record your Aadhar number. If this number is eligible for subsidy check your bank account. You should have the subsidy amount credited. A little hard to believe but that is what they say.

Now here enters the Business. The money is routed through the banks. These banks will now be routing millions if not billions of dolor equivalent of Indian Rupees. The banking system will now be awash with short term deposits. They will face the problem of low revenue customers and the need to optimize real estate with large number of low value transactions. This will spurt new banking channels and instruments - stored value cards, optimization of ATMs for the less literate, cards and plastic money in smaller towns and villages, swiping machines and what and all.

Pals, there is money to be made here. If indeed money is given as the government is stating at least in the initial term there will be a spurt of liquidity in the retail market till such a time that the beneficiaries will already account for it in the spending when the extent of liquidity induced per day into the retail market will stabilize. Now every thing will require accounting and reporting even if it will be a new cloth store in Ralegaon Siddi-after good food after all people will attempt to look good. Every body will get money more in the rural areas and they have to adopt IT computing power.

...Thus the real Indian domestic market for IT will emerge is my humble submission.