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4 Reasons Why You Must Have Aadhaar - Outside View by PersonalFN

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4 Reasons Why You Must Have Aadhaar
May 12, 2017

The success or failure of any national level programme can be gauged by 3 parameters:

  • Its reach and effectiveness
  • Positive difference it may bring in one's life
  • Acceptability among masses

If these parameters were applied to test the Aadhaar programme, one of the most important campaigns in India, we must say it's been successfully run over last 7-8 years. And now it's at a crucial juncture: Aadhaar may soon become an indispensable part of our life.

Do you know how may Aadhaar cards have been issued in India? Don't be surprised by its reach.

Until February 28, 2017, Unique Identification Authority of India (UIDAI) issued 112.26 crore Aadhaar. Barring the North-Eastern states, the reach of the Aadhaar campaign has been robust.

Speaking about the Aadhaar programme and its success, The World Bank's chief economist Mr Paul Romer recently said, "The Aadhaar system is the most sophisticated identification programme in the world."

"It's the basis for all kinds of connections that involve things like financial transactions. It could be good for the world if this became widely adopted," he added.

Arguably, there have been some concerns about an individual's privacy that could be breached with Aadhaar.

Speaking about this issue, Mr Romer suggested that, "It should be part of the policy of the government to give individuals some control over the data that the private firms collect and some control over how that data is used."

When Aadhaar is receiving recognition at the highest level, undermining its importance is unwarranted. Rather, the Supreme Court's latest verdict has cleared the way for the Government to launch Aadhaar on a much bigger platform.

Silencing the sceptics, a bench led by Chief Justice J S Khehar passed a judgment, "For giving benefits of welfare schemes, it (Aadhaar) cannot be pressed. They (government and its agencies) cannot be stopped from seeking Aadhaar for non-benefit schemes like opening of bank accounts."

And this is a wake-up call for those who believed until now that it's perfectly okay not to have an Aadhaar number/card/identification.

Soon Aadhaar might be made mandatory for...

  1. Filing income tax returns
  2. Opening a bank account
  3. Getting a new mobile phone connection
  4. Getting a passport

It wouldn't be surprising at all to see Aadhaar replacing PAN in the foreseeable future. Until now, tax evaders were using multiple PAN numbers to dodge their tax liabilities; now it would become increasingly difficult for them.

Similarly, linking Aadhaar with mobile phone connections and passport facility may address some significant national security concerns. Once the Aadhaar is linked to voluntary services, ease of transactions will improve, and the encumbrance of maintaining KYC records will reduce substantially-another positive.

In response to data security issues, Communications And Information Technology Ministry has assured that, "Access to the data repository of UIDAI, called the Central Identities Data Repository (CIDR), is provided only to authorised personnel through authorised secure applications after following well established security procedures and protocols. Security of data is monitored at all the times including in storage. UIDAI has been declared ISO 27001:2013 certified by STQC with respect to Information Security including data repository location which has added another layer of IT and security control assurance. In pursuance of sub-section (1) of Section 70 of the IT Act 2000, UIDAI data repository location has been declared as protected system by National Critical Information Infrastructure Protection Centre (NCIIPC)."

UIDAI has also assured Aadhaar cardholders from time to time about the robustness of the security systems protecting data privacy.

On this backdrop, it seems Aadhaar is going to become an essential support of your identity. It's time you get with the programme!

PersonalFN is a Mumbai based personal finance firm offering Financial Planning and Mutual Fund Research services.


The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Equitymaster do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. Please read the detailed Terms of Use of the web site.

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