Government Is Going Overboard With Aadhaar; Mindless Expansion Can Be Dangerous

Making Aadhaar mandatory is a dangerous move.
  • The government has won one half of the battle for linking PAN with Aadhaar, but it is in danger of losing the larger case on privacy if it mindlessly pushes Aadhaar to areas it was never intended.

The irrational haste with which the Narendra Modi government is rushing to make Aadhaar compulsory for almost any and every purpose will cost it dearly. Last week, the government made Aadhaar mandatory for bank accounts, sending everyone a chilling reminder that Big Brother is not only watching you, but now has your finances at his finger-tips.

There is no better way to kill a good idea and make people suspicious of your intentions than to repeatedly shove Aadhaar down unwilling throats.

Let me be clear: I opposed Aadhaar when the United Progressive Alliance (UPA) government began collecting biometrics without a law to back it. I changed my position when the National Democratic Alliance (NDA) government showed some willingness to provide at least a figleaf of privacy protection by enacting the Aadhaar (Targeted Delivery of Financial and other Subsidies, Benefits and Services) Act, 2016. I also have no problem if Aadhaar is mandatory for tax filing and PAN numbers – a position upheld by the Supreme Court recently.


I also believe that Aadhaar is a huge business enabler, as it is a platform that can be used to start and expand any business that needs consumer IDs to be confirmed and addresses verified. The rapid expansion of Reliance Jio’s footprint, or the launch of payment banks with millions of new customers acquired in a jiffy, would never have been possible without Aadhaar.

But these advantages will be frittered away if the government now demands that every financial or non-financial activity the citizen engages in has to be linked to Aadhaar. The idea behind Aadhaar is to give IDs to those who cannot easily get it, and to enable government to weed out fake beneficiaries and multiple PAN cards.

But Aadhaar cannot be, and should not be, a financial surveillance mechanism. The job of ferreting out tax-evaded transactions can easily be done by making PAN mandatory for bank accounts (as it already is except for Jan Dhan) and by asking merchants and banks to report transactions above a certain value. Aadhaar cannot replace PAN as the main instrument for preventing tax evasion.


Concerns about the mindless extension of Aadhaar go beyond just privacy. Reason: even if we did have a strong privacy law (as the government has promised), there is no defence against hacking and leakage of information collected even legally.

A case in point is the Niira Radia wire-tapping. It was done legally by the tax department, but the tapes were leaked and no one has been held responsible for it.

How is a privacy law going to protect us from hacking and illegal leaks, when it will be impossible to catch those who did the damage?


If a citizen’s financial details are leaked to some criminal, who will she go to for redress when the damage is done and there is no one but the state that is responsible for this leak? Will the new privacy law offer full compensation to those who lose money even if leaks that are difficult to pinpoint? Or will it demand proof from unwary citizens who do not have the ability to do so?

The best safeguard against misuse of Aadhaar and leakage of private data is to make the unique ID compulsory only for limited purposes. In all other cases, it must be purely voluntary. There is no case for demanding that bank accounts are invalid if not seeded with Aadhaar.

The government has won one half of the battle for linking PAN with Aadhaar, but it is in danger of losing the larger case on privacy if it mindlessly pushes Aadhaar to areas it was never intended.


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