New Delhi: Resetting the dialogue on the Aadhaar scheme, which is stuck in the Supreme Court over several issues, finance minister Arun Jaitley on Monday declared that the government will offer statutory backing to the Aadhaar Unique Identification (UID) scheme.

“We will undertake significant reforms such as the enactment of a law to ensure that all government benefits are conferred upon persons who deserve it, by giving a statutory backing to the Aadhaar platform," Jaitley said in his budget speech. “Public money should reach the poor and the deserving without any leakage."

The government’s move to introduce a law to give statutory backing for Aadhaar will clear the decks for the so-called JAM trinity—Jan-Dhan Yojana, Aadhaar and Mobile—which is aimed at expanding access to financial services.

The signal from the government is clear. To be a beneficiary in any government scheme, you will need an Aadhaar card, Jaitley explained in an interview to Lok Sabha TV. A bill for targeted delivery of financial and other subsidies, benefits and services using the Aadhaar framework will be introduced in the current session of Parliament.

The validity of the Aadhaar or UID scheme is pending before a constitution bench of the Supreme Court, which will scrutinize whether India has a fundamental right to privacy, which critics say this scheme violates.

A law to validate the UID scheme and bring it under a clear regulatory mechanism could allay the questions raised by its critics in theory, but in practice may not make much of a difference, experts said.

“In theory, the law should allay the critics’ questions. In practice, the naysayers would still find flaws in the Aadhaar scheme. This is just a statutory step; a constitutional question cannot be answered through a mere statute," said Rahul Singh, a research scholar at Balliol College, University of Oxford.

“The question before the Supreme Court is whether the constitution mandates a right to privacy. It would have been a better idea to amend the constitution to permit schemes such as Aadhaar. I believe the Supreme Court will need to hear the privacy challenge on its own merit. In fact, the statute itself might become a part of the challenge before the constitution bench.

“The real promise of the Aadhaar scheme (of course, with the security mechanism of collected data) is that it will inhibit siphoning of government subsidies and benefits. I suppose there will always be vested interests who would not be comfortable with such tracking mechanism," he added.

The Aadhaar project, in which at least 920 million citizens have been enrolled, began through a government notification in January 2009 and lacks legislative backing. It was aimed at preventing leakages in benefit transfers and authenticating recipients of such benefits.

Last year, through two orders, the Supreme Court restricted the use of Aadhaar to only a few services—the public distribution system, transfer of subsidies for cooking gas and kerosene, the Mahatma Gandhi National Rural Employment Guarantee Scheme, the Pradhan Mantri Jan-Dhan Yojana, pension payments by central and state governments, and the Employees’ Provident Fund scheme. In 2013, the apex court ruled that the use of Aadhaar cannot be made mandatory for availing of government benefits.

The UID scheme was part of an effort to promote a cashless economy with digital initiatives such as biometric attendance, the Jan-Dhan Yojana, digital certificates, pension payments and the proposed introduction of payments banks.

“Instead of saying that a bill will be introduced, if the finance minister had instead said we will introduce a bill that complies with global data protection and privacy best practices, then everybody will be happier. This is not a new narrative—for six years, I’ve heard the government say that they will introduce a bill. I will believe it when I see the new bill," said Sunil Abraham, executive director of the Centre for Internet and Society, a Bengaluru-based research organization.

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