Why Supreme Court judgment on Aadhaar calls for an appeal

Aadhaar is critical plumbing for a welfare state. The verdict must be challenged on the grounds of individual choice and the freedom of the executive to frame policy.

Written by Nandan Nilekani | Updated: September 15, 2015 3:18 am
aadhaar, Aadhaar card, aadhaar card benefits, Supreme Court aadhaar card, aadhaar card PDS, Aadhaar card LPG, Aadhaar card application, India news The UIDAI system is completely ignorant of the usage of Aadhaar for seeding and for the Aadhaar Payments Bridge.

Mahatma Gandhi refused to join the Constituent Assembly that wrote our wonderful Constitution, but his advice to some of the members was, “Whenever you are in doubt, apply the following test. Recall the face of the poorest and the weakest man you may have seen, and ask yourself if the step you contemplate is going to be of any use to him. Will he gain anything by it? Will it restore him to control over his own life and destiny? Will it lead to swaraj for the hungry and spiritually starving millions?” I submit that the recent Supreme Court (SC) interim judgment on Aadhaar does not pass the Mahatma’s test and it must be appealed. All it needs is one small tweak.

To meet the unleashed aspirations of a billion people, “business as usual” will not do. The Indian state must use technology in a transformational way to accelerate social and economic justice and expand opportunity for all at scale and speed. Two of the four SC directives are unfair. The first two — wide publicity of Aadhaar being non-mandatory and ensuring that no benefits due to any citizen are denied without an Aadhaar card — are useful. But the last two — no use of Aadhaar cards or its information for anything other than PDS ration shops and LPG cylinders — must be appealed on the grounds of individual choice and the freedom of the executive to frame policy.

But let’s start with the facts that dispute some of the filings in this case. For example, in the banking sector, Aadhaar is completely voluntary and has not been made mandatory by the RBI. No banking information is shared with the Unique Identification Authority of India (UIDAI); all customer banking transactions are held by regulated banking entities governed by bank secrecy laws. The UIDAI system is completely ignorant of the usage of Aadhaar for seeding and for the Aadhaar Payments Bridge (maintained by the National Payments Corporation of India, an RBI-regulated entity). When a customer does an Aadhaar authentication at, say, a microATM, the Aadhaar system knows that an authentication was done, but not the purpose for which it was done. Similarly, when an electronic know your customer (eKYC) is done, the Aadhaar system releases the name and address to a regulated entity, but does not know the purpose. Also, whenever a person’s Aadhaar number is used for an authentication or an eKYC, he gets an alert by SMS/ email that his number has been used. The Aadhaar system ensures privacy by design — it uses a federated architecture, that is, banking data is wholly inside the banking system, healthcare data wholly in the healthcare system, etc. Moreover, a person can elect to “lock” her own Aadhaar number, so no authentication or eKYC is ever done without her “unlocking” it. Biometric data is never shared by the UIDAI under any circumstances.

The first ground for appeal is the freedom of individual choice. Enrolment in Aadhaar is voluntary and individuals granting permission for the UIDAI system to share their name and address in a secure way with another system for their own convenience and benefit hardly qualifies as a violation of their right to privacy. The upsides of the voluntary use of Aadhaar for financial inclusion, for example, are immense. Aadhaar is used by individuals in the banking system to: First, open an account with eKYC; second, seed an already opened bank account; third, receive government benefits through the Aadhaar Payments Bridge; and fourth, withdraw money from a microATM using Aadhaar biometric authentication. All four uses of Aadhaar are voluntary, but simpler, faster, cheaper and far more convenient than the alternatives. The data is only shared with the customer’s consent. Most importantly, the same data is already widely available on the internet via election rolls.

The second ground for appeal is based on executive freedom to frame policy. On what basis did the court choose the use of Aadhaar for gas cylinders over other subsidies? Why allow ration shops to use Aadhaar for authentication and eKYC to “open” a ration account, but stay silent on Aadhaar’s eKYC to getting a bank account or a SIM card? Why be silent on the use of Aadhaar authentication and eKYC for other social and economic interventions like biometric attendance, the Jan Dhan Yojana, the Mahatma Gandhi National Rural Employment Guarantee Scheme, eSign (digital signatures) and new payments banks? Post this judgment, the Election Commission, the Pension Fund Regulatory and Development Authority and the Employees’ Provident Fund Organisation have put their Aadhaar usage plans on hold. Government expenditure in India will rise substantially from the current 17 per cent of GDP over the next few decades; a large part of this expenditure growth will be subsidies for our poor. Fraud is the biggest enemy of the Rs 4 lakh crore India already spends on subsidies. Why deny the Indian state the use of Aadhaar for efficient and effective subsidy-targeting and providing conveniences to its people, as long as the use of Aadhaar is voluntary?

India was a reckless experiment in 1947 — poor, large, linguistically rich and religiously diverse countries were not supposed to survive as democracies. But the radical innovation of a Constitution that gave universal franchise — some women in Switzerland, for instance, only got to vote in 1972 — has created a wonderful democracy. However, it is important to acknowledge that over the last 69 years, our political democracy (one man, one vote) has not always been complemented by social democracy (one man, one value) and economic democracy (one man, one opportunity). Aadhaar is critical plumbing for the Indian state to leapfrog developed countries in creating a modern welfare state, end poverty, create opportunities and meet our tryst with destiny.

My humble submission is that the Supreme Court’s interim judgment needs only one small tweak. An Aadhaar holder must be able to use her number and share her own name and address in any application of her choice, as long as it is voluntary.

The writer is former chairman of the Unique Identification Authority of India, and co-author of the forthcoming book ‘Rebooting India: Realising a Billion Aspirations’.