Don't rush to get Aadhaar number

The erosion of its identity as a single-identity proof is reducing the utility significantly

The Centre’s move to delink Aadhaar from liquefied petroleum gas (LPG) subsidy is the latest blow to the idea of having a “single identity number” for the people. Once considered a game-changer, the relevance of Aadhaar has been consistently coming down.

When the first card was issued in Maharashtra, it was promised to be a window to get all benefits from the government and resolve all the know-your-customer (KYC) issues that consumers faced.

As on today, you can open a bank account using your Aadhaar number. You can even get a new mobile number with it. However, when it comes to buying an insurance policy or investing in mutual funds, you will have to back up your Aadhaar card with another government-authorised identification document like Permanent Account Number (PAN).

But those who painstakingly got an Aadhaar card made don't know what to do with it. And those who were planning to get it made soon, are in a fix. “At present, one should wait and see how it will pan out before rushing to get an Aadhaar card made,” says Ashvin Parekh, senior expert and advisor-financial services, EY. It may take anywhere between 60 and 90 days (or even more in many cases) to get an Aadhaar card. So far, Unique Identification Authority of India (UIDAI) has issued numbers to 429.6 million people. A government official, who had been associated with UIDAI project, said, “It looks like the Aadhaar project and the objectives associated with it had gone haywire. But, given the government has taken such a step (withdrawn LPG subsidy) with its most ambitious project, there must be a valid reason behind it. So, lets wait and watch.”

Most feel that Aadhaar has moved away from the original premise of being the single identity proof, which would have as many information about an individual as possible. But on various occasions, UIDAI's role was diluted by denying incentives linked to it.

Like, the Supreme Court had ruled that Aadhaar was not mandatory for essential services such as salary, provident fund disbursals and marriage and property registrations in September 2013. In the initial days, no financial institution accepted Aadhaar as identity proof. It was only in December 2012, over two years after the first card was issued, that the Reserve Bank of India (RBI) allowed banks to accept Aadhaar as valid proof to open bank accounts.

Parekh felt it was a major blow to the UIDAI project. But still it can be salvaged, as it is a huge database of individuals' details and biometric. Experts said if there were apprehensions about the product, the government could still go back to the drawing board and redo things given the amount of resources gone behind UIDAI. “At the same time, it needs to be given more teeth and more incentives need to be linked to it. Only then with the public find value in it,” says the government official quoted above.

Earlier, another former member of the project had called Aadhaar a 'random' identity proof, which may take a long time before it gets mandatory for one and all.