Home / Politics / Policy /  Cabinet clears Bill that gives statutory status to UIDAI

New Delhi: The Union cabinet on Tuesday cleared the National Identification Authority of India Bill, giving statutory backing to the Unique Identification Authority of India (UIDAI) which issues Aadhaar numbers, even as the Supreme Court refused to modify its earlier order against making the Aadhaar number compulsory for availing benefits.

The Bill, which will likely be taken up in the winter session of Parliament, is long overdue and its consideration by the cabinet may have been prompted by the Supreme Court’s observations on 23 September that the Aadhaar number cannot be mandatory for government schemes.

“The Bill is to give a statutory backing to the UIDAI for issuing Aadhaar numbers and delineate power and functions of the authority," said a government official, who did not wish to be identified.

A spokesperson for UIDAI declined comment.

The government’s Aadhaar programme has been opposed by activists for fears ranging from misuse of data to breach of privacy, and ever since its adoption by the Congress as one of the key talking points ahead of next year’s general elections, it has attracted the ire of opposition parties as well.

The direct benefit transfer (DBT) programme that transfers benefits ranging from scholarships to pensions to cooking gas subsidies directly to the Aadhar-linked bank accounts of beneficiaries has become one of the talking points of the Congress’ campaign ahead of upcoming state polls as well as parliamentary election due in early 2014.

Addressing the concerns raised by the Parliamentary Standing Committee on finance, headed by senior Bharatiya Janata Party leader Yashwant Sinha, the Bill which was approved by the cabinet has made provisions to protect the privacy of individuals, the government official added.

Mint has not reviewed a copy of the Bill or the proposed amendments.

“The cost estimate for the project is 12,400 crore," the person added.

UIDAI, which has issued 440 million Aadhar numbers, had already spent 3,490 crore of this amount as of 30 September.

The Bill was first introduced in the Rajya Sabha in December 2010 and was referred to the standing committee. The Sinha-led parliamentary panel submitted its report a year after asking the government to reconsider the scheme itself and draft a fresh law. It pointed out, among other things, issues related to privacy, duplication by other agencies, cost, and the absence of an enabling legislation.

Mint learns that the Bill is based on a new draft that incorporates at least some of the panel’s suggestions. However, a senior government official said that all recommendations have not been accepted.

“Some of the major concerns raised didn’t require any amendment of the Bill," said a senior planning commission official, who asked not to be identified.

UIDAI has been functioning on the basis of an executive order despite the delay in providing a legislative backing to it. On 27 August, the ministry of petroleum and natural gas issued a press release that said linking Aadhaar is mandatory to avail the 435 cooking gas subsidy.

“In order to avail transfer of cash subsidy into the bank account, Aadhaar number of the LPG consumer has to be linked to the LPG consumer number and the bank account of the LPG consumer for which a three month grace period from date of launch is provided," it said.

The ministry launched the scheme in 18 districts on 1 June and expanded it to 97 districts in early October.

In September, responding to a public interest litigation (PIL), the Supreme Court said “no person should suffer for not getting the Aadhaar card, inspite of the fact that some authority had issued a circular making it mandatory".

The government filed an application for modification of the order, which was rejected by the Supreme Court on Tuesday.

The petroleum ministry had filed the application as the order could hamstring its efforts to link the cooking gas subsidy to Aadhar-linked bank accounts (customers pay the market price and the subsidy is transferred to their accounts).

The government plans to extend the coverage of the cooking gas subsidy transfer to 289 districts by January 2014. Oil marketing companies transferred 272 crore of subsidy payments to over 20 million cooking gas consumers by early September, a government release said.

The court will take up the case again on 21 October to hear the petitions challenging the government’s decision to make Aadhar card mandatory for availing certain government schemes and subsidies

A third senior government official cited a cost-benefit analysis by the National Institute of Public Finance and Policy that found “substantial benefits" through using Aadhar.

To be sure, some economists believe there are less expensive alternatives to Aadhaar.

In an article in Economic and Political Weekly in March, Reetika Khera, assistant professor at the Indian Institute of Technology, Delhi, mentioned end-to-end computerization in the public distribution system, as was being used in Chhattisgarh, as an alternative.

UIDAI chairman Nandan Nilekani may contest the Lok Sabha elections from Bangalore as a Congress candidate.

Anirban Sen in Bangalore contributed to this story.

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