Almost about a decade back, Income Tax Department initiated a drive to spread the reach of Permanent Account Number (PAN) through an idea which many in the system believed could lead to disaster.
Ignoring the skeptics, the I-T department outsourced the enrollment of people for PAN cards throughout the country. The grand plan associated with the whole exercise, was to turn PAN into a national identification number by introducing biometric features.
In due course, however, it was realized that PAN had its own limitations as people looked at it as some kind of tax trap. The number of PAN card holders and income tax returns filed at present, tell the story. Income tax returns filed in the country is around 35 million only while the total number of PAN card holders is about 120 million.
The thought of making PAN the national identification number has lost its fizz but the government is now taking steps to link it to AADHAAR and NPR (National Population Register).
A provision has already been made to provide AADHAAR number allotted by the Unique Identification Authority of India (UIDAI) to the Indian citizens in PAN application Form 49A on voluntary basis.
The existing PAN holders can also add information of their AADHAAR number to the I-T department while applying for a new PAN card or making some changes or correction in their existing PAN details.
Discussions are also going on with the PAN service providers and UIDAI to start the procedure of online authentication of AADHAAR on the basis of demographic and biometric attributes of the PAN applicants.
This would mean that after online authentication of AADHAAR, the assessee information can be enabled in PAN database immediately.
The Registrar General and Census Commissioner of India also proposed to the Central Board of Direct Taxes (CBDT) recently to link PAN with NPR. Under the proposal, Ministry of Home Affairs will store PAN information along with the NPR data on the smart card to be issued as Resident Identity Cards.
The consent regarding storing PAN information along with NPR data with certain observations has been sent by the CBDT to the home ministry.
All the NPR cards will also have AADHAAR numbers, and thus PAN, NPR and AADHAAR would be linked with each-other in the ultimate run.
The whole system will be critical for the government for identification, authentication and also investigation purposes.
The UIDAI will soon start providing the electronic authentication platform based on AADHAAR information to the banks for opening of accounts and other service providers including telecom companies for giving connections.
This facility would allow banks and other service providers check the details of a person applying for their services online from the AADHAAR database.
The whole PAN-AADHAAR-NPR system, which appears scattered at present, is expected to take concrete shape, once the coverage of AADHAAR number grows substantially in the coming months.
The government had earlier this year devised an integrated approach to end the conflict between UIDAI and NPR.
It cleared a scheme under which UIDAI has been allowed to enroll additional 400 million people in 16 states over its initial mandate of enrolling 200 million people. In other states, NPR will do the job of collecting biometric data. Both will give AADHAAR numbers to the people they will register.
The scheme will ensure that the whole of country gets AADHAAR number by 2014.
In case of discrepancies between UIDAI data and NPR data, NPR will prevail.
The chip-based Multipurpose National Identity Card issued by the NPR will capture 15 details of every individual.
So, the stage is set for a co-ordinated functioning of the three critical individual identification modes – PAN, NPR and AADHAAR.
While primary use of PAN is for the tax purposes, AADHAAR will help in identifying right people for disbursement of cash subsidy and entitlements to the beneficiaries and NPR will facilitate identification for the purposes pertaining to law enforcement.
All the three together will be a potent tool for any government agency to do profiling of any individual or a group of people quickly and effectively and this will not only help in revenue but also in public administration.