One of the biggest verdicts this year was that of the Aadhaar card in India. The Aadhaar card is a 12-digit unique code which can be obtained by the citizens of India, based on their demographic and biometric data. The card has come under a lot of scrutiny with the Government using the same to store a public database for welfare and citizen schemes.
However, with rumours of a data breach and plans to make the card mandatory for important documents like I-T returns and bank accounts, the case was taken to court by people who had concerns over third-party data sharing.
Here’s what the bench read out before giving out the verdict:
- Aadhaar had become a talked about expression both in India and abroad.
- It is better to be unique than the best because being the best makes a person number one while being unique makes him the only one
- The UIDAI is an established statutory body and all enrolling agencies are to be deputed by the body
- The attack on Aadhaar is solely on the premise that it has the potential to enable certain intrusions and thus form a surveillance state
- Any chances of duplication are also eliminated with the Aadhaar, as observed by CJI Sikri.
Highlights of the verdict:
The September 26th verdict read out by the Supreme Court of India removed Section 57 and Section 33(2). Here are a few of the other highlights of the verdict:
- Indian citizens no longer need to link the Aadhaar card with their mobile numbers or their bank accounts
- Aadhaar is also not mandatory for opening a bank account
- Both corporate and private entities will not be able to access data and contractual provisions do not have the right to ask for the same.
- The Supreme Court has upheld Aadhaar as a Money Bill by the Supreme Court
- CBSE, NEET and other examination bodies cannot mandate Aadhaar
- The Government cannot issue Aadhaar cards for immigrants.
With the verdict out, what are the ultimate pros and cons of the same?
- With the Government not allowed to issue Aadhaar cards to immigrants, the crackdown on illegal individuals entering the country becomes easier
- The provisions that allowed for sharing Aadhaar data on grounds of national security were also struck down. Agencies such as CBI will not be able to misuse the same information
- Aadhaar is also mandatory for anyone availing government schemes and subsidies. This will help in curbing any form of leakage.
- Further, not having to link the Aadhaar means that commercial banks, e-wallets and other establishments cannot access your data. This is integral to data security and data sharing concerns that a lot of individuals had bought up over the past few years.
- One of the major sectors affected by the Aadhaar verdict is the fintech industry. This includes e-wallets, online brokerage houses, loan givers and peer to peer lending platforms
- By striking down section 57, which mandated the use of the Aadhaar number for establishing the identity of an individual, these companies will have to re-strategize and change their privacy policies
- Also, companies that use the Aadhaar-based KYC to acquire newer customers will have to change the way they verify their own customers.
- Initially, it used to take 30 hours to on board a client via the Aadhaar system, but now it might take close to 5 or 6 days to confirm the same with a physical KYC.
- Companies will also have trouble in landing non-Aadhaar based KYC as it is an expensive affair. Without the Aadhaar, the cost of landing a customer is around Rs. 100. With the Aadhaar, the same process costs just Rs. 15
- Telecom industries will suffer as well as they have invested a lot in paperless schemes, which rely on non-Aadhaar based e-KYC
- With close to 500 million people linking their Aadhaar account – mostly in urban cities and towns – it will be hard to enroll them without the card. At least 80% of new users have linked their accounts with the card, so now delinking them will prove to be a setback
What does the Supreme Court say about the Aadhaar?
The Aadhaar card is constitutionally invalid, according to the SC. There is no need to link the same with bank accounts nor mobile numbers. It will also not be needed for any school or college admissions. However, the Aadhaar card will be needed to link UID with the PAN card for IT returns.
The provision that allowed the sharing of the data on grounds of national security has been struck down by the court. This means private companies do not have the right to ask for the number in order to fill details.
You might also be interested in reading-
The SC Aadhar Ruling: How it affects the Telecom industry
Supreme Court Judgement on Aadhaar Card and its impact on Indian banks
How will the fintech and payments industry change after the Aadhaar Ruling?
Let it go: How to Delink your Aadhaar card