Aadhaar verdict whittles down Modi’s Digital India ambition

In upholding the overall constitutional validity of the Aadhaar Act while striking down some of its sections, the Supreme Court essentially performed the task that the Rajya Sabha would have 

The majority 4-1 judgement of the five-member Constitution Bench of the Supreme Court in the Aadhaar petition was not quite what the Narendra Modi government expected. The BJP can, of course, claim a partial victory in that the constitutional validity of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 as a Money Bill was upheld.

But the verdict came with several riders, which effectively pruned Aadhaar to what it was at the time of its launch in 2009. The then UPA government had envisaged it as a unique identification programme meant for the poor and marginalised who are beneficiaries of social welfare schemes of the government. The idea was to eliminate leakages, corruption and middlemen in the delivery of services with the help of Aadhaar.

The Narendra Modi government, which was critical of the Unique Identity Programme while in the Opposition, widened the reach and scope of Aadhaar once it came to power. The 12-digit ID number became mandatory for accessing services ranging from banking, mobile phones, air travel, payment banks, school admissions and what have you.

Aadhaar suddenly became a requirement for the entire population and became part of the Digital India initiative of the government which was vigorously pushed post-demonetisation by the Prime Minister. On it rode the expansion plans of several banks and digital payment platforms. Corporate entities also saw a great opportunity to commercially exploit Aadhaar data by launching identity-based services.

The Supreme Court judgement, delivered on September 26, had the following key takeaways which diluted the Aadhaar Act:

* Aadhaar is no longer mandatory for opening bank accounts, getting mobile phone connections, education schemes, school admissions, appearing in entrance examinations etc. It will only be required if grants are being applied for from the consolidated fund of the government.

* Changes in the Prevention of Money Laundering Act (PMLA) which made seeding bank accounts to Aadhaar mandatory, has been declared unconstitutional. So, linkage of bank accounts is henceforth not a requirement.

* The clause in Section 57 of the Act, which allows the use of “Aadhaar number for establishing the identity of an individual for any purpose, whether by the state or any corporate or person…” has been struck down. This essentially means that the doors to commercial exploitation of Aadhaar data have been closed.

* Section 33 (ii) has been struck down. The section allows for disclosure of identity information in national interest if requested by an officer above the rank of Joint Secretary. The court said that any such request will now require a judicial warrant.

* The provision in Section 47, which stated that no offence punishable under the Act would be taken cognisance of unless the complaint is made by the UIDAI, has been struck down. The court held that a citizen has the right to file complaints and these will have to be addressed if the grievance is valid.

Thus, the grand Digital India programme has literally been whittled down in the majority judgement read out by Justice AK Sikri and concurred with by Chief Justice Dipak Misra and Justice AM Khanwilkar. Justice Ashok Bhushan gave a separate opinion which largely went along with the majority view. In his dissenting order Justice DY Chandrachud was severely critical of the Aadhaar Act calling it “entirely unconstitutional”.

According to sources in the banking industry, the Aadhaar judgement will come as a blow for companies like Paytm and Reliance Jio which use Aadhaar-enabled Know Your Customer (eKYC) as a one-step process to identify customers. It will become far more expensive for such companies to expand their customer base if they are denied access to Aadhaar as they will have to find alternate ways of customer identification. This will slow down their growth and shoot up cost of operations. Also, mobile service providers like Airtel and Vodafone, who had opened payment banks hoping to link their mobile customer base to the service, may find their growth trajectory retarded by the verdict.

Many would argue that while upholding the Act, the apex court, in effect, has carried out an exercise that the Rajya Sabha would have undertaken had the Aadhaar Bill been placed before it for discussion. But the Modi government, in order to bypass the Upper House, had cleared it as a Money Bill in the Lok Sabha where it enjoys majority support. The Rajya Sabha cannot decline a money bill that has been cleared by the lower house.

In fact, the majority judgement, has taken the Act as a Money Bill and narrowed its ambit to provisions laid down in the Constitution for such a legislation which covers taxes, governmental borrowing or withdrawing money from the consolidated fund of India. According to a lawyer, the court treated the Act as a Money Bill and clipped its larger reach.

The Congress party is fairly pleased with the judgement since it has restored Aadhaar to what it was originally envisioned for. Congress president Rahul Gandhi and spokesperson and lawyer Abhishek Singhvi pointed out in their tweets that the court had reset the Aadhaar programme on the path of its original purpose.

However, there are several grey areas that still need to be resolved. Key among them is what happens to the data that has already been collected by schools, government organisations, mobile service providers, banks and other corporate entities. It will have to be destroyed and this will have to be done under the watch of the government/UIDAI.

Activists who have been fighting for years to scrap Aadhaar altogether will be displeased with the judgement. But they can take comfort in Justice Chandrachud’s dissenting judgement which was scathing: “Passing of the bill as money bill when it does not qualify as one bill is a fraud on the Constitution since it violates the basic structure,” he noted. The judge also warned that “potential surveillance is possible through Aadhaar”.

Further nuances will surface in the days to come when the judgement is read closely. For now, citizens can rest assured that they won’t have to reach for their Aadhaar number everytime they avail of services they are paying for, and legitimate to them.

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