It’s quite possible that in this Parliament session, India will make the transition from being a wasteful welfare state to a reformed economy that allocates scarce resources efficiently.
The Modi government on Thursday introduced the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Bill, 2016. When signed into law, the bill will make Aadhaar -- the unique biometric identification number -- central to all social security schemes and services of the government.
With this, the Modi government hopes to address concerns that Aadhaar -- in the absence of safeguards – will be open to misuse and breach the privacy of citizens. Biometric information isn’t just any other information. It is made up of portable, physical traits of a person. World over, the concern with biometric information is much the same. People fear not its use, but its misuse.
In a smart move, the government introduced the proposed legislation as a money bill, which can be only introduced in Lok Sabha, or the lower house.
Unlike general bills, a money bill has to be about matters related to taxes, public spending or borrowing, according to article 110(1) of the Indian Constitution. Generally, this is understood to be routine financial matters. The Rajya Sabha, or the upper house, can recommend changes to a money bill. However, these aren’t binding and, if the lower house rejects the suggestion, the bill is automatically passed. This scheme of things follows the Commonwealth parliamentary system.
By treating Aadhaar as a money bill, the government has ensured that a hostile Opposition cannot defeat the bill in Rajya Sabha, where the ruling BJP is short of numbers. Moreover, the bill won’t be subjected to joint parliamentary committees, to which contentious legislations are often referred for greater scrutiny.
Aadhaar needed the safeguards that the bill proposes. However, a money bill virtually pre-empts any scope for full parliamentary oversight. The quick-fix approach taken by the government could open more legal battles ahead.
Given the opposition to Aadhaar, the bill, after it is signed into law, could be challenged on the ground that it did not qualify to be a money bill in the first place.
In the Westminster tradition, only a Speaker can certify or reject a money bill. There were doubts over whether the Insolvency and Bankruptcy Code, 2015 was fit to be a money bill, as moved by the Modi government in the winter session. The Finance Bill, which contains mostly taxes, is a typical money bill. When the government included the creation of the Public Debt Management Agency in the Finance Bill, Opposition members disputed it. This provision was later removed from the Finance Bill.
The Aadhaar bill, as tabled in Lok Sabha, aims to provide “good governance, efficient, transparent, and targeted delivery of subsidies, benefits and services, the expenditure for which is incurred from the Consolidated Fund of India, to individuals residing in India through assigning of unique identity numbers to such individuals.”
“It comprehensively addresses the biggest concern that Aadhaar can violate privacy. The safeguards are substantive,” an official said, requesting anonymity.
The “Statement of Object and Reasons” section of the bill states that “correct identification of targeted beneficiaries” of social programmes has become a “challenge” for the government. Linked to this is the problem of corruption and theft of welfare handouts. The bill states: “In the absence of a credible system to authenticate the identification of beneficiaries, it is difficult to ensure that subsidies, benefits and services reach the intended household.”
Chapter 6 of the bill provides for safeguards to privacy. The bill provides for “security and confidentiality of information”, restrictions on sharing and access to a citizen’s biometric details. There are penal provisions for tempering with data or stealing of details etc.
When retired judge K S Puttaswamy challenged Aadhaar on the ground that it violated a citizen’s privacy, the Supreme Court ruled that Aadhaar could not be made mandatory for receiving any subsidy. Later, the court allowed its use for subsidised cooking gas and ration. The court has also referred the larger question of privacy arising out of Aadhaar to a Constitution bench. This could be path-breaking, as the Indian Constitution doesn’t explicitly confer a right to privacy. What impact the court’s order will have on the Aadhaar law is yet unclear.
Economists such as Jean Dreze have cited stories of how conditional cash transfers that Aadhaar will facilitate could also help the private sector create markets. The Aadhaar programme could eventually be used for efficient government as well as marketplace transactions.
In fact, the UIDAI website states: “Aadhaar’s guarantee of unique and centralised, online identity verification would be the basis for building these multiple services and applications, and facilitating greater connectivity to markets.”
So will Aadhaar be restricted to subsidies alone? The answer largely, at this stage, is ‘yes’. However, Section 58 of the Aadhaar bill states: “Nothing in the Act shall prevent the use of Aadhaar number for establishing the identity of an individual for any purpose, whether by the State or any body corporate or person, pursuant to any law, for the time being in force, or any contract to this effect…” A preliminary reading suggests this could open up, lawfully, the scope for linking Aadhaar with the markets.
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