The amendment to the Aadhaar Act entails use of India's national biometric ID by states governments for their schemes that are funded through the 'Consolidated Fund of the State'.
"The states had demanded (this). As per Supreme Court order, Aadhaar is allowed where the funds are going for beneficiary schemes coming straight from the central government. It will enable the use...the way subsidies to the central schemes are transferred from the central fund, Aadhaar can be used for transferring state subsidies," Information and Broadcasting Minister Prakash Javadekar told reporters while briefing about the Cabinet decisions.
Earlier this month, Parliament had approved amendments to the Aadhaar and other laws to allow voluntary use of the 12-digit unique number as ID proof for obtaining mobile phone SIM cards and opening bank accounts. The government also inserted a new clause allowing the use of Aadhaar data by states for implementation of their schemes.
A government official, who did not wish to be named, explained that since the particular clause was included after the Bill was introduced in Parliament, the Cabinet nod is in the nature of a 'post facto' approval.
According to the Aadhaar and Other Laws (Amendment) Bill, 2019 - posted by the Lok Sabha after its passage in the house - a new section 5A was inserted.
"In section 7 of the principal Act, after the words 'the Consolidated Fund of India', the words 'or the Consolidated Fund of State' shall be inserted," it had said.
Section 7 of the Aadhaar Act pertains to targeted delivery of financial and other subsidies, benefits and services funded from the Consolidated Fund of India. With the insertion of the Consolidated Fund of State, states can also use the Aadhaar database for better targeting of schemes.
Javadekar said there are about 128 crore Aadhar cards registered so far, and use of Aadhaar for transfer of state subsidies will enable weeding out of fake beneficiaries.