UPSC MAINS 2019: The Aadhaar and Other Laws (Amendment) Bill, 2018

The Aadhaar and Other Laws (Amendment) Bill 2018


Topic: The Aadhaar and Other Laws (Amendment) Bill, 2018

Topic in Syllabus: GS Paper 2 : Indian Governance

The Aadhaar and Other Laws (Amendment) Bill 2018


The Lok Sabha has passed a bill to amend three laws to provide legal support to the government’s decision to allow voluntary linkage of Aadhaar with mobile phone numbers and bank accounts.


More about on news:

  • The government has introduced a Bill in the Lok Sabha to amend certain existing laws to provide legal backing for voluntary seeding of biometric Aadhaar ID for mobile SIM card and bank account authentication purposes.
  • The new Bill, Aadhaar and Other Laws (Amendment) Bill 2018, would amend the Telegraph Act and the Prevention of Money Laundering Act (PMLA) to provide for voluntary sharing of the 12-digit identification number for obtaining new mobile phone connections and opening bank accounts.
  • This government move comes on the heels of Supreme Court’s judgment in September 2018 striking down Section 57 of the Aadhaar Act that made seeding of the biometric ID with SIMs and bank accounts mandatory, stating that it had no legal backing.
  • the Bill was not in violation of the Supreme Court judgment and that Parliament has the authority to move a Bill on the basis of the judgment.
  • The amendments moved would also permit children, who would turn 18 years old, to opt out of the system.
  • The amendment Bill was cleared by the Union Cabinet in mid-December last year. The amendments will make sharing of Aadhaar details voluntary for opening bank accounts, school admissions and procuring mobile SIM cards.


Key features of the bill:


Offline verification of Aadhaar number holder:

  • Under the Aadhaar Act, an individual’s identity may be verified by Aadhaar ‘authentication’.
  • Authentication involves submitting the Aadhaar number, and their biometric and demographic information to the Central Identities Data Repository for verification.
  • The Bill additionally allows ‘offline verification’ of an individual’s identity, without authentication, through modes specified by the Unique Identification Authority of India (UIDAI) by regulations.
  • During offline verification, the agency must (i) obtain the consent of the individual, (ii) inform them of alternatives to sharing information, and (iii) not collect, use or store Aadhaar number or biometric information.


Voluntary use of Aadhaar to verify identity:

  • The Act provides for the use of Aadhaar number as proof of identity of a person, subject to authentication.
  • The Bill replaces this provision to state that an individual may voluntarily use his Aadhaar number to establish his identity, by authentication or offline verification.
  • The Bill states that authentication of an individual’s identity via Aadhaar, for the provision of any service, may be made mandatory only by a law of Parliament.
  • The Bill amends the Telegraph Act, 1885 and the Prevention of Money Laundering Act, 2002 to state that telecom companies, banks and financial institutions may verify the identity of their clients by (i) authentication or offline verification of Aadhaar, or (ii) passport, or (iii) any other documents notified by the central government.
  • The person has the choice to use either mode to verify his identity and no person shall be denied any service for not having an Aadhaar number.


Entities using Aadhaar:

  • Under the Act, usage of Aadhaar number for establishing the identity of an individual, by the State or a body corporate under any law, is permitted. The Bill removes this provision.
  • An entity may be allowed to perform authentication through Aadhaar, if the UIDAI is satisfied that it is (i) compliant with certain standards of privacy and security, or (ii) permitted by law, or (iii) seeking authentication for a purpose specified by the central government in the interest of the State.


Aadhaar number of children:

  • The Bill specifies that at the time of enrolling a child to obtain an Aadhaar number, the enrolling agency shall seek the consent of his parent or guardian.
  • The agency must inform the parent or guardian of (i) the manner in which the information will be used, (ii) the recipients with whom it will be shared, and (iii) their right to access the information.
  • After attaining eighteen years of age, the child may apply for cancellation of his Aadhaar.


Disclosure of information in certain cases:

  • Under the Act, restrictions on security and confidentiality of Aadhaar related information do not apply in case the disclosure is pursuant to an order of a District Court (or above).
  • The Bill amends this to allow such disclosure only for orders by High Courts (or above).
  • Further, under the Act, an officer not below the rank of a Joint Secretary may issue directions for disclosing information in the interest of national security.
  • The Bill amends this to allow such disclosure on directions of officers not below the rank of a Secretary.



  • Under the Act, all fees and revenue collected by the UIDAI shall be credited to the Consolidated Fund of India. The Bill removes this provision, and creates the Unique Identification Authority of India Fund.
  • All fees, grants and charges received by the UIDAI shall be credited to this fund.
  • The fund shall be used for expenses of the UIDAI, including salaries and allowances of its employees.



  • Under the Act, courts can take cognizance of an offence only if the UIDAI registers a complaint.
  • The Bill amends this to allow the individual to register complaints in certain cases, including impersonation or disclosure of their identity.
  • The Bill defines the Aadhaar ecosystem to include enrolling agencies, requesting agencies, and offline verification-seeking entities.
  • It allows the UIDAI to issue directions to them if necessary for the discharge of its functions under the Act.



  • Under the Bill, the UIDAI may initiate a complaint against an entity in the Aadhaar ecosystem for failure to (i) comply with the Act or the UIDAI’s directions, and (ii) furnish information required by the UIDAI.
  • Adjudicating Officers appointed by the UIDAI shall decide such matters, and may impose penalties up to one crore rupees on such entities.
  • The Telecom Disputes Settlement and Appellate Tribunal shall be the appellate authority against decisions of the Adjudicating Officer



  • It is a 12-digit unique number issued by the Unique Identification Authority of India (UIDAI) by taking a person’s biometric details such as iris scan and fingerprints, and demographic information like date of birth and address.
  • The UIDAI will start a new service from next year to help Aadhaar holders who do not have valid proof of residence of current location to update their address easily by using a letter containing a secret PIN.
  • The Aadhaar Virtual ID (VID) will allow you to authenticate transactions and e-know-your-customer (KYC) services instead of providing your Aadhaar number, to both private and government institutions.
  • According to the UIDAI, for now, you can use this for online address update in your Aadhaar. Read on to find more about the VID and how you can get one.


Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016

  • The Union Government on 12 July 2016 notified the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016.
  • Eligibility: Every resident shall be entitled to obtain an Aadhaar number. A resident is a person who has resided in India for 182 days, in the one year preceding the date of application for enrolment for Aadhaar.
  • Information to be submitted: To obtain an Aadhaar number, an individual has to submit biometric (photograph, finger print, iris scan) and demographic (name, date of birth, address) information.
  • Enrolment: At the time of enrolment, the individual will be informed of the manner in which the information will be used, the nature of recipients with whom the information will be shared and the right to access this information.
  • Usage of Aadhaar number: To verify the identity of a person receiving a subsidy or a service, the government may require them to have an Aadhaar number. If a person does not have an Aadhaar number, government will require them to apply for it.
  • Key Functions of UIDAI: The UIDAI authority will specify demographic and biometric information, assign Aadhaar numbers to individuals, authenticate Aadhaar numbers and specify the usage of Aadhaar numbers for delivery of subsidies and services.


Supreme Court Verdict on Aadhaar:

  • The five-judge Constitution Bench of the Supreme Court on September 26, 2018 upheld most of the provisions of the Aadhaar Act by 4:1 Majority while hearing the petitions challenging the constitutional validity of Aadhaar (Targeted Delivery of Financial and Other. Subsidies, Benefits and Services) Act, 2016.
  • Of the five-judges, Chief Justice Dipak Misra, and Justices A.K. Sikri, A.M. Khanwilkar, Ashok Bhushan validated the provisions of the Aadhaar with few restrictions, while Justice D.Y. Chandrachud held that the entire Aadhar project is unconstitutional.
  • The Aadhaar, issued by the UIDAI, seeks to establish a database of personal identity of every Indian resident, by assimilating their demographic and biometric information.
  • Majority of judges upheld the validity of Aadhaar, Justice Chandrachud dissented.
  • Section 57 of the Aadhaar Act, allowing private entities to use Aadhaar for verification purpose, struck down.
  • Aadhaar – PAN Linkage mandatory.
  • No need of Aadhaar for CBSE, NEET, UGC and school admissions.
  • No need of Aadhaar for mobile connections and for opening bank accounts.


About UIDAI:

  • The Unique Identification Authority of India (UIDAI) was founded in 2009 under the United Progressive Alliance (UPA) regime with former Infosys CEO Nandan Nilekani as its chairman. Nilekani resigned in 2014.
  • Unique identification project was initially started by the Planning Commission as an initiative that would provide identification for each resident across the country.
  • It is used primarily as the basis for efficient delivery of welfare services. It also acts as a tool for effective monitoring of various programs and schemes of the Government.
  • It is the organisation behind the Aadhaar, a 12 digit unique number linked with an individual’s demographic and biometric information. Aadhaar serves as the proof of identity and address anywhere in India.


Sample Question:

Recently passed Aadhaar amendment Bill  allows private bodies such as banks and telcos to use Aadhaar as one of the ‘know your customer’ (KYC) methods for authenticating users. Does this bill violates the Supreme Court’s judgment on Aadhaar which limited the Aadhaar authentication for services, subsidy and benefits under Section 7 of the Act? Critically examine.