Is Aadhaar meant only to help the government deliver subsidies to the poor, or is it also meant for commercial use by private companies?

Soon after the Modi government introduced the Aadhaar Bill in Parliament stating that the legislation “confines itself only to governmental expenditure,” legal researcher Usha Ramanathan pointed out how a private company, TrustID, was already advertising commercial authentication services using Aadhaar, a biometrics-linked government database.

Ramanathan pointed out that the private company had launched a mobile app to verify “everyone else instantly” using their Aadhaar number. It was offering commercial services on Aadhaar even as a case about the privacy of the information collected for the biometrics-linked government database of Aadhaar is pending in Supreme Court. The Aadhaar (Targeted Delivery of Financial and Other Subsidies and Services) Bill had then not even been signed into law, and the Bill was still in parliament.

Responding to this article, Finance Minister Arun Jaitley has written a letter to Jairam Ramesh, a Congress member of Parliament in the Rajya Sabha, on the use of Aadhaar for authentication by private companies.

In his March 22 letter, Jaitley points to section 57 of the Aadhaar Act, which allows any private person or corporate body to use an Aadhaar number to establish the identity of any individual for any purpose. Jaitley then points to section 8 under which such private entities will have to take an individual's consent before collecting their identity information, inform them about nature of their information that may be shared, and the uses to which the received information will be put to.

He notes that “once the Bill is notified as an Act”, any violation of these provisions can be challenged through judicial remedy for a criminal offence.

What Jaitley does not say

The Aadhaar Bill was notified as law on March 28. Swabhimaan Distribution Services, which owns TrustID, registered as an Aadhaar authentication agency in November 2015, and the app was launched in January 2016.

When an individual enrols in Aadhaar, they disclose their name, gender, address and fingerprints and iris scans. This information is held in a database maintained by the Unique Identification Authority.

TrustID app offers that users can send anyone's Aadhaar number, gender and name – or even biometrics – and the app claims it can verify their identity. It does so by sending an authentication request to the UID servers, which maintains in its database the time of request, identity of the private company requesting for authentication, and the response provided.

While Jaitley in his letter puts the onus on the requesting agency, he does not mention under what conditions access to authentication requests was given to TrustID. He is also silent on how this was done prior to the law being notified.

The minister does not say if the contract under which access was provided to Trust ID by the UIDAI will now be rescinded. He seems to only provide a justification saying from now on a law will be in place.

In an op-ed in The Indian Express, advocate Apar Gupta has pointed out that Aadhaar Act offers ineffective judicial remedy. As per the new law, Aadhaar users have no right to be informed when a crime related to their personal data occurs, nor will they be able to approach a court directly because the UID authority has the exclusive power to make complaints in case of any violation, or breach of privacy.

This is what Section 47(1) of the Aadhaar Act says:

No court shall take cognizance of any offence punishable under this Act, save on a complaint made by the Authority or any officer or person authorised by it.

The question of whether consent was taken will arise only if the Aadhar user is notified each time their data is accessed by someone, which is not the case right now.

As per Aadhaar Act, the UID authority is responsible for both maintaining the security and confidentiality of identity information and authentication records, as well as for approaching a court in case of a security breach – which is a conflict of interest.

Thus, even a person whose information is collected and shared without their consent and knowledge cannot invoke the criminal penalty that Arun Jaitley has cited in his letter. Such a complaint can only be made by Unique Identification Authority. The minister is silent whether the UIDAI intends to take any such action against TrustID.

Potential to profile individuals

Allowing private companies the use Aadhaar authentication at a price shows that the government's stated aims of Aadhaar being only meant for targeting subsidies are misleading.

The use of Aadhaar by private companies increases the risks of profiling when these databases are combined.

Monika Chowdhry, who heads the marketing division of Swabhimaan Distribution Services, the company that created TrustID told that over time, the company will retain the Aadhaar number of individuals. Their aim, she said, is to create a private verified database of TrustIDs.

At the same time, when more private companies – airlines, telecoms, insurance, real estate firms and more – start asking for Aadhaar as a proof of identity for availing their services and authenticate individuals from the servers of the UID Authority, the government would have a database that would include an individual’s personal identity data, as well as the details of the authentication requests such as time of request, identity of the entity requesting for authentication, and the response provided.

Analysing this, the PRS Legislative Research has stated that Aadhaar Act does not specifically prohibit law enforcement and intelligence agencies from using the Aadhaar number as a link (key) across various datasets (such as telephone records, air travel records) in order to recognise patterns of behaviour.

“Techniques such as running computer programmes across datasets for pattern recognition can be used for various purposes such as detecting potential illegal activities,” notes PRS. “However, these can also lead to harassment of innocent individuals who get identified incorrectly as potential threats.”

PRS adds that the United States has enacted a law that requires each government agency engaged in data mining to submit an annual report to the legislature on all such activities. The Aadhaar Act has no such provisions. It does not explicitly prohibit private companies from using Aadhaar number as a link (key) across various datasets. In fact, there is a writ petition pending in the Supreme Court that claims that Aadhaar may be in violation of right to privacy.

There are additional questions on how Aadhaar will not be a "black box", just providing Yes/No in response to queries from a requesting entity. Under section 8(4), the UIDAI while confirming the identity can legally share with the requesting authority the personal identity information of the person requesting authentication, which is both a data security and confidentiality risk.

Several MPs in the Lok Sabha had asked that the Aadhaar legislation be sent to a parliamentary committee to be examined further. Rajya Sabha voted and passed four amendments relating to categorically keeping Aadhaar enrolment as voluntary and on privacy safeguards in the Act. The government rejected both suggestions as it rushed to pass the Aadhaar Act in its original form within two weeks of the Bill being introduced in the parliament.

The Supreme Court is now set to examine the contours of the right to privacy flowing from the Aadhaar case, in which the Modi government has argued that there is no fundamental right to privacy in the Constitution.