The RBI should extend the deadline for enforcing detailed know-your-customer norms for payment wallets, and the government should expedite fresh legislation that would allow use of Aadhaar for purposes other than transfer of funds from the government. Alongside, the government should pass a rigorous data protection law that would strengthen India’s hands in the ongoing international tussle over e-commerce and address the anxieties of those worried about the misuse of Aadhaar data.
The Supreme Court majority judgment that threw out the challenge to Aadhaar, India’s unique identity project, also restricted the use of Aadhaar to making payments from the consolidated fund of India. So, Aadhaar is fine for making direct benefit transfers from the government to individual accounts, but cannot be used by, say, a microfinance company to authenticate the claimed identity of a potential client. This stems from the Aadhaar law having been passed as a Money Bill without going through the Rajya Sabha. It should be possible to bring in a new law that validates Aadhaar per se and extension of its use, with the concurrence of the Aadhaar holder, to biometric authentication meeting know-your-customer norms, and get it passed in both Houses of Parliament. Further, simultaneously or even before it, a data protection Bill should be passed.
Justice D Y Chandrachud’s dissenting judgment observed that Aadhaar might have been tolerable, if we had in place an adequate law on data protection. Once a good data-protection law is passed and institutions put in place to enforce it, all save theological objections to Aadhaar should evaporate.
Aadhaar is too valuable a resource for the poor, the disempowered and the migrant to be left half-formed. A contingent difficulty in getting the law through an obstreperous Upper House persuaded the government to present the Aadhaar Bill as a Money Bill, truncating utilisation of its full capacity. That deficiency should be removed and the poor empowered in matters financial with an unrestricted Aadhaar.
via For Aadhaar without restrictions on use