A think tank affiliated to the Reserve Bank of India has flagged problems related to the Aadhaar system, including security concerns, the quality of authentication and its unclear financial benefits. The Institute for Development and Research in Banking Technology was established by the RBI in 1996 as an autonomous institute.

In its staff paper on biometrics, published in October 2017, the institute said the benefits of Aadhaar were largely unclear and the Aadhaar database was a “single target” for cyber criminals and India’s external enemies.

“Aadhaar faces a number of challenges over the short-and-long-term,” S Ananth, an adjunct faculty at the institute, said in the paper. “The primary challenge is to protect the data from prying and excessive profit seeking excess of the business world...In an era when cyber threats are frequent, the major challenge for UIDAI [Unique Identification Authority of India] is to protect the data under its control since the biometrics is now an important national asset which has huge ramifications for various government programmes and the banking system.”

The loss to the economy and the citizens in case the UIDAI data is attacked is “incalculable”, the think tank said. “There is a need for caution in the manner in which Aadhaar is used by the government, especially as more programmes and economic activities are linked to it,” the paper concluded. “Only time will tell if the benefits outweigh the costs or vice versa.”

The paper, however, said that Aadhaar has been a “stupendous success” because of the efforts of the Union and state governments and the RBI. As on June 30, 2017, more than 115.70 crore people have been provided with Aadhaar, the think tank said.

Reports of Aadhaar data breached

The report comes to light at a time when the Centre is facing criticism after the Unique Identification Authority of India filed an FIR against The Tribune for a report on the Aadhaar programme. The daily had reported that anonymous sellers, operating through messaging service WhatsApp, were allegedly providing access to details of the more than 1 billion Aadhaar holders.

A five-judge Constitution bench of the Supreme Court is set to begin the final hearing of petitions challenging the legality of Aadhaar programme based on privacy concerns on January 17. In a landmark ruling in August 2017, the Supreme Court had declared privacy a fundamental right protected under Article 21 of the Constitution.

This was seen as a major blow to the Centre’s push for Aadhaar. With the privacy question out of the way, the court resumed hearing the petitions in November 2017.