A MeitY move: Aadhaar validation by private entities gets green signal

Source: The post is based on the article “A MeitY move: Aadhaar validation by private entities gets green signal” published in Business Standard on 21st April 2023

What is the News?

The Ministry of Electronics and Information Technology has proposed a new set of rules that would allow private entities to carry out Aadhaar authentication. 

What are the proposed new rules the government is planning to bring on Aadhaar authentication?

Currently, only government ministries and departments are permitted to undertake Aadhaar authentication for various Central and state government schemes.

The proposed amendment to the rules would allow private entities to build platforms to facilitate the Aadhaar authentication for the beneficiaries.

Private businesses will be allowed to carry out Aadhaar authentication for purposes such as the usage of digital platforms to ensure good governance, prevention of dissipation of social welfare benefits, enablement of innovation and the spread of knowledge.

How can private entities carry out Aadhar authentication?

Private entities that want to use Aadhaar authentication will have to submit a proposal to the Central government with justification for their purpose. 

Once private entities submit their proposals to the Central Government with justifications for using Aadhaar authentication, the government may then forward these proposals to the UIDAI. 

The UIDAI will then review the proposals and inform the Central Government about whether or not to allow the applicant entity to use Aadhaar authentication.

What are the concerns against these new rules?

The new proposed rules raise concerns as it essentially proposes to expand the use of Aadhaar-based authentications to a range of private entities. 

In 2019, the government amended the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 under which it allowed only banking and telecom companies to carry out such authentications for know-your-customer (KYC) requirements.

The amendment was necessitated after the Supreme Court, in 2018 had struck down Section 57 of the Aadhaar Act which allowed the use of Aadhaar data by any “body corporate or person” – essentially private companies – to establish the identity of an individual for being “unconstitutional”.

Even the subsequent 2019 amendment was challenged in the Supreme Court. The case is yet to come to a conclusion.