Wider ambit for Aadhaar: Centre wants pvt entities, states to use it for authentication

According to amendments proposed to the Aadhaar Authentication for Good Governance (Social Welfare, Innovation, Knowledge) Rules, 2020 by the IT Ministry Thursday, private entities and state governments would be allowed to conduct Aadhaar-based authentication for promoting “ease of living” of residents and enabling better access to services for them.

Apart from that, they would also be able to carry out Aadhaar authentication for the usage of digital platforms to ensure good governance, preventing dissipation of social welfare benefits, and enabling innovation and the “spread of knowledge”.  The Centre has invited comments to the draft rules by May 5.

Although some stakeholders have already raised concerns over the vagueness in the meaning of “ease of living”, the government, following consultations, could modify the phrase.

The draft amendments also say that any entity that wants to utilise the measure will have to submit a proposal to the Centre with justification on why it wants to conduct Aadhaar authentication and whether it is in the “interest of the state”. If the government finds the proposal to be fit, it will refer it to the Unique Identification Authority of India (UIDAI), which is responsible for the Aadhaar database.

Entities requesting Aadhaar authentication will have to pay a cost per authentication to the Centre – currently, the UIDAI charges Rs 20 per e-KYC transaction, and 50 paise per yes/no authentication transaction.

The fresh measure is especially significant as it essentially proposes to expand the use of Aadhaar-based authentications to a range of private entities. In 2019, the government had amended the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016, under which it had 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”. It was under this provision that private companies like Paytm and Airtel Payments Bank sought Aadhaar details from customers prior to the landmark judgement. Even the subsequent 2019 amendment was challenged in the Supreme Court. The case is yet to come to a conclusion.

The official quoted above said that the proposed amendments do not violate the 2018 Aadhaar judgement by the Apex court.

“The judgement was from a perspective of protecting people’s privacy and stopped the seeding of Aadhaar data with privately held databases. The concern then was the private sector accessing Aadhaar, but under the new proposal, no private entity will have access to Aadhaar details of a person – it is a simple yes or no authentication to establish one’s identity,” the official said.

The proposed rules, as framed currently, also potentially open the gates for social media platforms like Facebook, WhatsApp and Twitter, potentially enabling Aadhaar-based verification of users. However, the official said that the possibility of that happening was “unlikely”.

“The assumption that social media platforms want Aadhaar authentication is not true – they are happy to allow anonymous use of their sites. Their DNA is built around anonymous use. When they offer premium services like in the case of Twitter, Facebook and Instagram, then they have to carry out e-KYC either themselves or through a bank, which is already happening,” the official said.