Though even those opposed to Aadhaar have welcomed the SC judgment since it allows those without an Aadhaar number to retain their PAN cards, this is a small part of the story. The real import is that, with Section 139AA of the Income Tax Act upheld, all those with Aadhaar numbers – that’s 115 crore Indians – have to mandatorily quote this while filing tax returns. Those that don’t have an Aadhaar number needn’t rush to apply in order to save their PAN cards, but that’s probably a small number. With this, the tax department can now weed out millions of fake PAN cards, which was the reason for wanting to link the two databases. It will now be easier for the taxman to track those who spend a lot of money but pay little taxes – they got away by quoting fake PAN numbers to, say, credit card companies, but this will now not be possible.
With SC ruling in favour of Aadhaar, a big potential legal challenge is out of the way for using Aadhaar for ration shops, pensions and KYC for various purposes. It has to be kept in mind, though, that Aadhaar alone is not being used for KYC – in the case of passports, for instance, Aadhaar is just to prove identity; some other means have to be used for proof of residence including a police visit.
While all eyes are now on the Supreme Court’s verdict on whether Aadhaar violates the right to privacy, the government needs to work on a separate privacy law. In the past, some databases linked to Aadhaar have been leaked, and this is something such a law will prevent though even the Aadhaar Act seeks to deal with this. It is important to keep in mind the leaks are not of biometrics from the Aadhaar database. The leaks, say, from the pensions department contain the names and addresses of pensioners, the bank accounts in which the pensions were deposited, along with the Aadhaar number. These details could have been put on the department’s website even without an Aadhaar number, but the fact that they have an Aadhaar number makes people believe Aadhaar data is being leaked and can be used to create a partial transactional profile. Even here, it is important to keep in mind, no financial transactions can be made or serious financial profile created since banking data is protected by banking laws. Of course, regardless of how SC rules, it has to be kept in mind such pension-type data is stored to ensure transparency, so that a 3rd-party audit can check if the pensions are being given to genuine beneficiaries. If all this data is to be kept secret and not revealed to anyone, how will the issue of transparency be addressed?