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The Permanent Account Number (PAN) card for Income Tax, Voter Id for casting votes, Passport for foreign travel, ration card, driving license et al – the list of identity documentation in our Country is endless. It was for this reason that on 28th January, 2009, the plan for a single and unique identification number was brought out in India, the largest democracy in the world. Thus, through a notification issued on the same date, the Unique Identification Authority of India (UIDAI) was established and on 23rd June, 2009, Nandan Nilekani, co-founder of Infosys, was appointed to spearhead the project.

The UIDAI was initially set up as an attached office of the Niti Aayog. On 3rd March 2016, in order to provide legislative support to Aadhaar, the Aadhaar Bill was introduced as a money bill in the Lok Sabha and later on became the Aadhaar Act, 2016. The UIDAI is now an independent statutory body and comes under the purview of the Ministry of Electronics and Information Technology.

The main issue the Aadhaar sought to address was fake id creation. Other than the passport, the creation of all the aforementioned identity documents is relatively easy and does not require the individual to be physically present. The id creation processes are still largely conducted manually; hence, the possibility of human error and resultant risk of creation of fake and duplicate id remains very high. On July 7, 2010 the Times of India reported fake ids being created in Nagpur for Rs. 200. With the Aadhaar, the individual needs to physically be present. Not only is his/her image captured on the camera (as is the case with the passport and driving license now), but biometric data, i.e. physical characteristics such as the finger print and retina scans are also taken and stored in the database. This feature was very essential to ensure that every individual is allotted a single Aadhaar only and that each such Aadhaar is unique. This in turn facilitates transfer of subsidies directly to beneficiaries’ Aadhaar-linked bank accounts and eliminates the middlemen. Ever since its implementation the Aadhaar has been instrumental in helping prevent leakage of several government welfare schemes. In November 2017, Railways and Coal Minister Piyush Goyal had said that Aadhaar exposed over 5 crore “ghost accounts” – 3.5 crore fake LPG connections and 1.6 crore fake ration cards. 

Overtime, several issues surfaced with the Aadhaar and its implementation. One of them related to duplicacy, which is the primary issue the Aadhaar scheme aims at solving. The Government projected the de-duplication as the single biggest benefit of Aadhaar, in terms of the cost savings that would accrue when subsidies would not be disbursed to the same person or family twice. Finance Minister Arun Jaitley was quoted to have said that the Aadhaar scheme helps the Government save Rs. 90,000 crore every year with targeted delivery of welfare programmes. However, in October 2013, a Kerala-based paper Matrubhumi published a report in which PV Narayanan, a resident of Panatthadi panchayat was allotted two Aadhaar numbers with the same name, slightly different photos and, more surprisingly, the same fingerprints. For an ambitious, IT-enabled project such as this, even a marginal rate of error can have serious implications for the security and trust it is intended to establish.

Another challenge was seeding the Aadhaar to various services such as income tax which had been made mandatory. In the initial phase of Aadhaar enrolment, due to lack of proper training at the enrolment centres, several personal details such as name, father’s name, date of birth and even gender were entered incorrectly in the database. The process of seeding the Aadhaar with the permanent account number (PAN) of income tax would oftentimes throw errors. This caused several last-minute hiccups in the tax filing process and undue inconvenience to a large number of tax payers. In most of these cases even the mobile numbers were not linked to the Aadhaar, in the absence of which, OTP-facilitated online updation of Aadhaar details was not possible. In due course the UIDAI allowed for partial match in demographic authentication to improve success rate of the seeding. This relaxation was eventually withdrawn vide notification dated 27th November, 2017 issued by the UIDAI.

Certainly, the Aadhaar has come a long way since then. According to K. J. Alphons, Minister of State for Electronics and IT, as on 15 February, 2018, over 89% (against a population of 1.31 billion, Aadhaar enrolments totalling 1.17 billion) of the population had been assigned the Aadhaar. New Aadhaar enrolment centres with better trained personnel have been opened and completeness of the Aadhaar database is ensured.

However, the most pertinent concern that remains is that of security. In April 2018, a Hyderabad-based security researcher found 3 different portals of the Andhra Pradesh Government disclosing Aadhaar data of 90 lakh adults and 70 lakh students. In November, 2017, the UIDAI reported that 210 central and state government websites had publically displayed Aadhaar details which would give hackers access to sensitive information such as biometrics, PAN and bank account number. In another report, Aadhaar data of millions was being sold for Rs. 500.

To address these concerns, the UIDAI introduced the ‘Masked Aadhaar’ feature, which allowed for download of an e-Aadhaar in which the first 8 digits of the Aadhaar are masked. Beside from this the 16-digit ‘Virtual Id’ was also introduced which can be generated from the Aadhaar portal and be used in place of the Aadhaar for authentication purpose. On 22nd January 2019, Identity Devices Sweden AB, a company pioneering innovation in digital identity and biometric technology, announced the Biometric Privacy Platform to enable greater data security, privacy consent and confidentiality for Aadhaar holders.

The potential and untapped benefits of Aadhaar are many. Once the initial implementation hurdles are overcome, Aadhaar can help make systems many times more secure and transparent and help address the many evils such as tax evasion, ghost id creation, corruption and even terrorism, all at once. Recently the Ministry of Corporate affairs made director KYC and linking of Aadhaars with Director Identification Numbers (DIN) mandatory in a bid to identify shell companies and fake directors. With controlled implementation of Aadhaar, and seamless linking of Aadhaar with mobile numbers, and other public services such as property registration, issue of death records, healthcare records, etc., the benefits from this project are bound to be significant.


Bose, S. S. (2010, July 7). Fake voter ID card for just Rs 200. The Times of India. Retrieved from: http://timesofindia.indiatimes.com/articleshow/6137030.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

Dwivedi S. (2018, April 30). In A Week, Aadhaar Data Of 70 Lakh Children On Andhra Pradesh Government Sites. NDTV. Retrieved from : https://www.ndtv.com/india-news/despite-laws-no-action-against-government-agencies-displaying-aadhaar-data-1844747

ET Online. (2018, January 5). How Aadhaar is killing the ghosts that haunt welfare schemes. Economic Times. Retrieved from: https://economictimes.indiatimes.com/news/economy/policy/how-aadhaar-is-killing-the-ghosts-that-haunt-welfare-schemes/articleshow/62378973.cms

Moneylife Digital Team. (2013, October 15). Aadhaar de-duplication myth busted. Any answers, Mr. Nilenkani? Moneylife News & Views. Retrieved from: https://www.moneylife.in/article/aadhaar-de-duplication-myth-busted-any-answers-mr-nilekani/34884.html

PTI. (2018, March 7). More than 89% population issued Aadhaar, says Union Minister KJ Alphons. Business Today. Retrieved from : https://www.businesstoday.in/current/economy-politics/aadhaar-covers-over-89-percent-population-alphons/story/272126.html

PTI. (2019, January 22). Identity Devices Launches Innovative Biometric Platform to Safeguard Aadhaar User’s Privacy and Data. The Week. Retrieved from: https://www.theweek.in/wire-updates/business/2019/01/22/pwr7--identity%20devices.html

The Times of India, Business. (2018, September 26). Aadhaar verdict historic, scheme helps save Rs 90,000 crore a year: Arun Jaitely. The Times of India. Retrieved from: https://timesofindia.indiatimes.com/business/india-business/aadhaar-helping-save-rs-90000-crore-a-year-arun-jaitley/articleshow/65964318.cms

Unique Identification Authority of India, Government of India. Official facts retrieved from: https://uidai.gov.in/about-uidai

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Written By Devanshee Pitty

A Chartered Accountant by profession, student at heart.

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