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Promoting Digital Transactions: MeitY for linking Aadhaar with bank accounts

As per the Finance Act, 2017, Aadhaar number has been made mandatory for filing income-tax returns and while applying for a new Permanent Account Number (PAN) from July 1.

At a time when the legitimacy of mandating Aadhaar for services such as filing of income tax returns is being debated, the Ministry of Electronics and Information Technology, along with banks, is working on a campaign to push for seeding of Aadhaar with bank accounts in an effort to promote digital payments, according to government sources. A source said that a campaign document prepared by the IT ministry proposes to disseminate information that “in order to be able to undertake digital transactions and pay or receive money” every individual would need to “link their mobile number with their bank account” and “link their Aadhaar number with their bank account”.

To spread information among the public, IT Secretary Aruna Sundararajan wrote a letter to the Press Information Bureau’s Director General AP Frank Noronha dated March 25. According to the aforementioned government source, Sundararajan wrote: “A special national campaign is thus being undertaken by the government and the banks to enable the public to seed their Aadhaar and mobile number with their bank account. In this context, MeitY has taken up various activities targeting the mobilisation of people to seed their Aadhaar and mobile number with their bank account. As part of this, a special national campaign has been taken up, in coordination with the banks and state governments.”

As per the Finance Act, 2017, Aadhaar number has been made mandatory for filing income-tax returns and while applying for a new Permanent Account Number (PAN) from July 1. Taxpayers will be required to link their PAN cards with Aadhaar numbers; PAN cards not linked to Aadhaar numbers before the July deadline will be deemed invalid, as per the amendments to the Finance Act. Furthermore, in January, the labour ministry had made the linking of Aadhaar cards with employee provident fund (EPF) accounts mandatory. In a notification, the ministry said that those without Aadhaar will have to apply to get enrolled by January 31, 2017.

Reminding the central government that Aadhaar cannot be made mandatory for any services, the Supreme Court had last September ordered it to remove a condition making it mandatory for students to provide Aadhaar numbers for various scholarship schemes. A bench led by Justice V Gopala Gowda had recalled an order of the top court in October 2015 whereby it was clarified that “the Aadhaar card Scheme is purely voluntary and it cannot be made mandatory till the matter is finally decided by this Court one way or the other”. But a letter sent by the central government to chief secretaries and administrators of all states and Union territories on July 14 had stated that only online applications under the National Scholarship Scheme will be accepted and “it may be noted that submission of Aadhaar is mandatory.”

The Telecom Regulatory Authority of India (Trai) has also recommended mandating Aadhaar number for new telephone connections, as well as seeding of Aadhaar for existing connections.

Several such decisions by the Centre to involve Aadhaar in its services has raised red flags with regard to privacy of the data kept by the Unique Identification Authority of India (UIDAI). In the debate on the Finance Bill, former finance minister P Chidambaram raised the point related to former cricket captain MS Dhoni’s Aadhaar details being leaked. To this, finance minister Arun Jaitley replied, “It was a case of an immature behaviour and the company has been blacklisted for 10 years. Another debate on the implementation and implications of Aadhaar is scheduled for April 10 in the Rajya Sabha.

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