Ever since, prime minister, N Modi – a crusader against corruption, nepotism and black money – took charge in 2014, those who had been in this game for decades having defrauded the country by gargantuan sums have unleashed an orchestrated plan to frustrate his attempts to cleanse the system.
An important component of this plan was to kill Aadhaar card which Modi has been using to give subsidy on food, fertilizers and LPG, pay wages under Mahatma Gandhi National Rural Employment Guarantee Act [MGNREGA], release pension and scholarship, file income tax returns and a host of other areas where there is evidence of misuse and misappropriation of funds.
First, a few words on how this foundation document [as Modi would prefer to call it] helps in reining in the loot of public money.
Aadhaar – a 12-digit unique identification number issued to a citizen by the Unique Identification Authority of India [UIDAI] – identifies the self with his/her biometric details viz. photograph, finger print, iris scan etc which cannot be faked unlike other customary details such as name, address, phone number etc which can be. It serves as a powerful tool to end faking of ration card, PAN, SIM, driving license, passport etc which in the past, were used to embezzle funds meant for the poor under welfare schemes, avoid payment of tax, launder black money and hide proceeds of bribe. Already, over one billion such cards have been issued.
By linking these documents to Aadhaar, the government can curb all wrongful activities which thrive on faking thereby bringing hundreds of thousands crore that legitimately belong to the national exchequer.
With this overarching objective, it got the Aadhaar [Targeted Delivery of Financial and Other Subsidies, Benefits and Services] Bill, passed in 2016. The Act made it mandatory for a person to enroll for Aadhaar to be eligible for receiving subsidy or government service. Further, vide Finance Bill for 2017-18, it amended the Income Tax Act [1961] to make seeding of PAN with Aadhaar and filing income tax [IT] return mandatory.
This made a few vested interest groups jittery. A clutch of petitions were filed in the Supreme Court [SC] challenging the constitutional validity of Aadhaar primarily on the ground that it infringes on the privacy of an individual. This involved deciding first on the question of whether ‘right to privacy’ is a fundamental right under the Constitution. Last year, a 9 judge constitution bench decided that this indeed was the case.
In regard to whether Aadhaar infringes on the right to privacy, a five-judge constitution bench headed by then, Chief Justice Dipak Misra in its order dated September 26, 2018, held that this is not so. In other words, the apex court has upheld the constitutional validity of Aadhaar. It has allowed the government to use it for delivery of all its subsidies. It has also permitted seeding of PAN with Aadhaar and filing IT return.
With this, the threat in regard to the possible decimation of a major weapon in the hands of Modi – administration for saving scarce national resources from loot by dubious elements has fizzled out. But, the big worrying point is about the SC disallowing use of Aadhaar for opening bank account as also for mobile phones.
It is an open secret that fraudsters/money launderers open multiple/fake accounts – often in the name of fake companies [commonly known as ‘shell companies’] – in the banks to park the proceeds of their ill-gotten wealth. They also use fake documents to defraud banks. But for these, the gigantic loot of Punjab National Bank [PNB] early this year, by over Rs 13,500 crore would have been unthinkable. Inflated/fake invoices have also been brazenly used in a number of other bank frauds unveiled thereafter. Aadhaar came as a savior to nip all these wrongs in the bud.
In this backdrop, to disallow use of Aadhaar for bank accounts has come as a big jolt. Considering the observations made by the judges during the proceedings of the case, the decision of the apex court was not entirely unexpected.
The bench had opined that “Aadhaar can do little to stop banking frauds. Bank officials were “hand-in-glove” with fraudsters and that scams do not happen because the culprits are unknown. Banking fraud does not happen because of multiple IDs. Aadhaar will not prevent a person in different capacities and through various entities could enter into multi-layered commercial transactions and take loans which are not “illegal per se”. The argument is untenable.
True, it may be difficult to prevent fraud, if fraudster colludes with bank officials. But, merely because of this, can one dispense with safeguards in particular, the KYC [know your customer] norm? These safeguards cannot be dispensed with under any circumstance – much less in a situation when it is suspected that a bank official will collude with the fraudster.
As regards, the example cited by the court “a person could enter into multi-layered commercial transactions …”, the very purpose of insisting on Aadhaar is to prevent it. With Aadhaar made mandatory for any transaction with the bank, this person cannot camouflage his identity and hence won’t be able to take multiple loans. Moreover, with bio-metric details [unique to the person] in bank records, in an event of his eloping with the money, the investigating agencies will find it much easier to nab him.
On linkage of Aadhaar with mobile phones, the judges had questioned the necessity of asking the entire population to go for it “just to catch a few terrorists”. Have the hon’ble judges thought through the devastation caused when a terrorist plants a bomb in a crowded market place? To prevent such situations, even if all mobile phones have to be seeded with Aadhaar, it is worth it.
In other areas such as passport, driving license etc, too where faking is rampant, the court’s decision to dispense with Aadhaar linkage is a matter of concern.
To sum up, the apex court order has vindicated Team-Modi and given a boost to its ability to stem the loot of resources by using Aadhaar. Even where voids have been left, these can be addressed by passing necessary enabling legislation. The union finance minister, Arun Jaitely has given enough hints in this regard.