The Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 provides the statutory backing to the Aadhaar project and regulates the collection, storage, use, and protection of Aadhaar data in India.
Background
- Aadhaar was launched in 2009 as an executive scheme.
- To give it a legal framework, the Aadhaar Act was enacted in 2016.
- The Act was passed as a Money Bill under Article 110 of the Constitution.
Objective of the Act
- Ensure targeted delivery of subsidies, benefits, and services funded from the Consolidated Fund of India.
- Prevent leakages, duplication, and fraud in welfare schemes.
- Establish a unique digital identity for residents.
Key Provisions
Aadhaar Number
- A 12-digit unique identity number issued to residents.
- Based on biometric and demographic information.
- Aadhaar number does not confer citizenship, only identity.
Eligibility
- Available to residents of India (living in India for at least 182 days in the previous 12 months).
- Not limited to citizens.
UIDAI (Unique Identification Authority of India)
- Established as a statutory authority under the Act.
- Responsible for:
- Aadhaar enrolment and authentication
- Data security and database management
- Regulation of Aadhaar ecosystem
Use of Aadhaar
- Mandatory only for subsidies, benefits, and services funded from the Consolidated Fund of India.
- Voluntary for other purposes, subject to consent.
Privacy and Data Protection Provisions
- Aadhaar data classified as sensitive personal data.
- Strict restrictions on:
- Sharing core biometric information
- Disclosure of identity information
- Data can be shared only:
- With individual consent, or
- By court order or national security authorization
Authentication
- Aadhaar authentication can be done via:
- Biometrics
- OTP
- Demographic verification
- Purpose is identity verification, not profiling.
Offences and Penalties
- Unauthorized access, data misuse, or identity theft is punishable.
- Penalties include imprisonment and fines.
- Initially, only UIDAI could file complaints (later diluted by court rulings).
Major Supreme Court Judgments
K.S. Puttaswamy (Aadhaar) Case, 2018
- Aadhaar declared constitutionally valid.
- Mandatory use restricted to:
- Welfare schemes
- PAN–Income Tax linkage
- Aadhaar made voluntary for:
- Bank accounts
- Mobile connections
- School admissions
Privacy as a Fundamental Right (2017)
- Aadhaar must satisfy:
- Legality
- Legitimate state aim
- Proportionality
- Procedural safeguards
Amendments (2019)
- Allowed voluntary use of Aadhaar for private entities with consent.
- Introduced offline verification to reduce data exposure.
- Enabled individuals to file complaints directly.
Criticism and Concerns
- Passage as a Money Bill questioned.
- Risks of:
- Surveillance
- Data breaches
- Exclusion errors in welfare delivery
- Weak independent oversight mechanism.
Significance
- Backbone of Direct Benefit Transfer (DBT) architecture.
- Enabled financial inclusion, welfare targeting, and digital governance.
- Forms the identity layer of India’s digital public infrastructure.
Conclusion
The Aadhaar Act, 2016 institutionalised a nationwide digital identity system aimed at efficient welfare delivery. While it has strengthened governance and inclusion, its long-term legitimacy depends on robust privacy safeguards, accountability, and strict adherence to constitutional principles.
