The Supreme Court has ruled that any transfer of citizens' data from the Aadhaar program gto private companies is unconstitutional. Photo: AFP
The Supreme Court has ruled that any transfer of citizens' data from the Aadhaar program gto private companies is unconstitutional. Photo: AFP

A public outcry has forced the Indian government to delay plans to roll out a digital identity program on every citizen, linking bank accounts and other financial data.

The mandatory linking of the controversial Aadhaar system with bank accounts and mutual funds has been postponed, according to an announcement issued on December 12 by the Department of Revenue under the Ministry of Finance.

The announcement stated that a new date will be announced later. However, adding to the confusion, the Ministry of Finance issued a press release stating that bank accounts have to be linked by March 31, 2018. It is not clear if this rule applies only to new accounts or existing ones as well.

The notification by the federal government came just a day ahead of a hearing in the Supreme Court, challenging the mandatory linking of the digital identity system to bank accounts and other financial products. On June 1, the government of India had issued a notification modifying the Prevention of Money laundering Act (PMLA) mandating that all citizens link their unique digital identity number, also known as Aadhaar, to their bank accounts. A similar order has been issued by the Department of Telecommunications asking citizens to link their Aadhaar number to cell phone numbers.

The Aadhaar project has become one of the most controversial issues in India, raising massive concerns about the government’s ability to carry out surveillance of citizens. While it was started as a “welfare” project to ensure better targeted deliveries of government subsidies, it was essentially a surveillance tool, predicated on the ability to track citizens and profile them.

Avoiding Judicial Scrutiny?

“One thing is clear. The hearing was slated to start from tomorrow and the government doesn’t want the court to look into this. That explains this last minute notification postponing the bank linking indefinitely,” Dr Usha Ramanathan, a legal researcher and one of the country’s biggest privacy advocates, told Asia Times. Ramanathan has been spearheading the move to scrap the Aadhaar project for over seven years and was instrumental in pointing out the various flaws in the project.

Pune-based Dr Anupam Saraph, a noted expert and designer of complex system has been another campaigner who has repeatedly raised concerns about the project over the last year. “The June 1 notification asking citizens to link their bank accounts was clearly illegal since the PMLA has no legal basis to freeze accounts of citizens. The government was aware of this and wanted to scare people into linking their accounts before the case came up for hearing,” he told Asia Times.

Reliable government sources said there was considerable concern over a “backlash from the public” if their bank accounts were frozen after December 31. Officials were worried that if the deadline was not postponed, many citizens would be denied access to their savings, which could lead to financial chaos.

Aadhaar Notification Dec 12, 2017
The Indian Government issued a notification on December 12, 2017 postponing the mandatory linking of bank accounts to the Aadhaar number.

Worried over the growing implications of the project, the Supreme Court was asked earlier this year to also examine whether privacy is a fundamental right. A rare, nine-judge bench of the Supreme Court unanimously ruled that privacy is a fundamental right as enshrined in various clauses of the Constitution. “It has been four months since the landmark privacy judgment came out. The government has not done anything and was possibly waiting for the last minute, so that more people signed up, before issuing this notification,” Ramanathan said.

Ironically, the Unique Identification Authority of India (UIDAI) had issued a press release last week stating that the linking was mandatory. The press release was issued in response to a viral video by a lawyer, Aishwarya Bhati, who had pointed out that the linking could not be mandatory since the interim orders of the Supreme Court had specifically mandated it to be used for a few welfare schemes. While UIDAI argued that the law had overtaken the judgment, skeptics like Saraph are not convinced. “If the circumstances have changed, then the UIDAI should have gone to court and sought a clarification. Why did they push it through by threatening citizens?”

A Surveillance Regime

Started by the Congress-led UPA government nearly eight years ago, the plan had seen massive opposition from the Bharatiya Janta Party (BJP). During that phase, the then Chief Minister of Gujarat, Narendra Modi, publicly tweeted that he had met up with the Aadhaar team and expressed his concerns about the security of sensitive personal data. The team was unable to come up with convincing answers to his queries.

However, some time between the meeting and his election as Prime Minister in May 2014, Modi seems to have had a change of heart about the project. It was revealed that Modi, as the Chief Minister had not only required that his state join the project, but also collected data that was not even mandated by the project.

As the BJP-led NDA government took over in May 2014, many had hoped for a roll back of the project. However, the government went ahead and began to promote the project by virtually threatening citizens with disruption of basic services, such as the ability to file income taxes.

Earlier, petitioners to the Supreme Court had challenged the project, by pointing out the massive potential for misuse. As a German diplomat posted in India recently told this correspondent: “Such a scheme is prohibited by law in Germany. We have seen how such a database of citizens’ data can be misused and German law explicitly prohibits it.”

The Supreme Court passed two interim orders. One prohibited the government from expanding the scope of the project while the other specified particular welfare schemes where the project could be deployed. But the Modi government pushed through a ‘Money Bill’ in Parliament in 2016, and did not allow the Opposition an opportunity to block it. It has also  failed to deliver welfare schemes in a targeted manner and has instead excluded thousands of people from marginalized communities from getting their mandatory benefits.

The move ensured that concerns expressed by law makers were not taken into consideration and the government managed to push through the law, enabling surveillance clauses on the grounds of “national security.” This gives the government unfettered access to sensitive personal data for profiling citizens. Due to the lack of privacy laws, this opens up citizens to manipulations by the government, that undermines democratic principles enshrined by the Constitution of India.