All India Radio (AIR) : Linking of Aadhar with Welfare Schemes and Services

  • IASbaba
  • January 18, 2018
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All India Radio
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Linking of Aadhar with Welfare Schemes and Services


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TOPIC: General Studies 2

  • Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
  • Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes;

In news: SC passed an order in Aadhar case where it was brought to court on question of linking all data- bank account number, mobile number, mutual funds accounts, income tax to Aadhar. The questions about privacy issues were the main concerns.

Earlier, there was no legal sanctity of Aadhar authority and government went ahead with taking biometric and giving Aadhar numbers. When government found about this flaw, it came out with Aadhar Act in 2016 under which the Aadhar authority will act and also created the constitutional authority with regards to protection of act. Under the clause 7 of Aadhar act, the government has the right to link and ask for Aadhar from citizens for giving benefits to common citizens as the funds are coming from consolidated fund of India.

The Ministry of Finance has come out that notification to link bank accounts with Aadhar. However, it has said that it is not under Aadhar act but under the Prevention of Money Laundering (PMLA), clause 9 wherein ministry of finance through discussion with and consent of RBI, asks the banks to link the accounts of individual to Aadhar number and even compulsorily filing of income tax return to Aadhar number.

Some of the individuals and companies had 2000 bank accounts. And they were scattered across geography and there was no system to link them together. The income tax returns were used to launder money. These were important from perspective of black money and corruption. These were two issues which government tried to tackle with Aadhar. The PMLA and its rules impose an obligation on reporting entities like banks, financial institutions and intermediaries to verify the identity of clients, maintain records and furnish information to the Financial Intelligence Unit of India (FIU-IND). Previously, the banks did have KYC forms to have information to link accounts of same customer. However, KYC has not been successful to link the data.

Continuous challenges

  • Creating one identity of a person is a continuous process. As the technology improves, there are new avenues through the person can establish a new identity. Biometrics and IDs are new concept in the technology. Earlier, government tried to link individual identities to bank through PAN numbers. This failed because people were giving different addresses to get multiple PAN card. Thus, there was no sanctity for uniqueness. Aadhar created unique identity for each individual citizens with regards to biometrics and IRIS detection.
  • India still has to get its Data protection law. Many institutions are now asking for Aadhar number and biometrics. Thus there are multiple places where biometrics are collected and one is not sure of its security. The citizens have to keep this clarity that aadhar number is only for authentication purpose and no biometrics are stored with any agency except UIDAI. Also, only Aadhar number has to be shared and not any other information because Aadhar number in itself is sufficient for them to link.. Though there is no data protection law, the responsibility of protection of data and not sharing it with private agencies is with Aadhar authority.
  • Sharing information with various websites such as amazon, social media sites like facebook gives them access to all private information in public domain. For protection of that data and no misuses, the government is coming out with a law.
  • The government is coming out with private sector also. There are various issues regarding the data protection laws. The government has come out with a white paper ‘global data protection framework for India’. It’s a global standard data protection law which will help to make the law.


The global data protection regulation are being implemented and concerns of the individuals with regards to privacy and sharing of information, not only thumb impression are being aimed to solve. There are several other information which can influence one’s decision making where private agencies can sell the confidential personal data to different authorities for marketing. Thus it can influence decision making of individuals. One must have seen that the search results on google is reflected back in any new website opened. Thus, data privacy is a concern which needs to be protected from state as well as non-state institutions. When it comes to state using the individual’s information, there is a need of a creation of such a regime which carefully and sensitively balances individual interests and legitimate concerns of the state.

Connecting the dots:

  • “The issue of data protection is important both intrinsically and instrumentally.” What do you understand by the statement- Explain

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