The Lok Sabha on Wednesday gave the final approval to the Aadhaar (Target Delivery of Financial and other Subsidies, Benefits and Services) Bill, 2016, on Wednesday evening, but after rejecting the amendments proposed in the Rajya Sabha.
With the passing of the bill in both houses, it will now be signed by the President into law and making Aadhar a legally-backed instrument for making available state-provided benefits to 1.25 billion citizens of the country.
Originally started by the Congress-led UPA government, the Aadhar was to be the basis of the whole process of subsidy reforms, including the Direct Benefit Transfer (DBT).
Aadhar or Unique Identity number, awarded to each citizen, holds particular importance for the Modi government, and the success of its financial inclusion push under the JAM (Jan Dhan, Aadhaar and Mobile) trinity.
By linking individual bank accounts to Aadhar number will help plug the spillage of spocial benefits and ensure targeted delivery.
The opposition has been opposing the use of Aadhar as a mandatory instrument for delivery of social benefits
The use of Aadhar has been opposed over the mandatory nature for availing subsidies and government benefits; the possibility of the bio-metric data shared with the government putting individual's privacy at risk and foreign citizens in the country obtain the number and using it to gain access to subsidies.
The government claims to have issued over 992 million Aadhaar cards, covering almost 97 per cent of the country's adult population.
Although the NDA government has clarified that Aadhaar will not be mandatory, banks are likely to insist on the number to implement DBT to skirt problems arising out of duplication. This is already being implemented as anyone approaching a bank to open a Jan Dhan account will have to produce an Aadhaar number.
For the government, however, the fate of Jan Dhan Yojna, the Modi government's flagship financial inclusion programme, depends on the Aadhar-linkages. Already, some 212 million accounts have been opened under the Jan Dhan Yojana, under which Rs34,260 crore deposits have been mobilised.
Given the primary purpose of Aadhaar is subsidy roll out through bank accounts, legal backing is critical for the unique ID.
The Rajya Sabha on Wednesday passed the Aadhaar bill with five amendments that the opposition insisted on, but these have all been rejected when the bill returned to the lower house.