Odd decision

Making Aadhaar mandatory for EPF is not justified

A recent gazette notification has made it mandatory for members of the Employees Pension Scheme (EPS) to “furnish proof of the possession of the Aadhaar number or undergo Aadhaar notification as per the procedure laid down by the Employees’ Provident Fund Organisation (EPFO)”. This must be complied with by January 31 for employees to keep availing pension, EPS membership and the central government’s contribution. But, the notification seems to be in violation of the Supreme Court’s repeated orders on permitted uses of the Aadhaar number. According to the last interim order of October 15, 2015, (in the case of KS Puttaswamy & Ors v Union Of India & Ors), the SC stated that the Aadhaar number “will not be used” except on voluntary basis for any purpose other than the dispersal of benefits and subsidies under the public distribution system scheme, LPG, MGNREGA, Pradhan Mantri Jan-Dhan Yojana, National Social Assistance Programme, and EPFO. The order made it clear that Aadhaar cannot be mandatory and no one may be denied any service for lack of an Aadhaar card. Meanwhile, the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act was passed in March 2016. But certain provisions of the Act, which propose to make Aadhaar mandatory for certain services, would be contrary to the interim SC order.

The EPS is run by the EPFO. While the pension scheme is a small component of the Employee Provident Fund (EPF), the two cannot be disaggregated. Deductions on account of the EPF are made mandatorily from every employee’s salary, with the government paying interest at a determined rate. As such, the latest notification implies that every salaried person must have an Aadhaar number. But, this is not the only instance of an apparent violation. There have been multiple examples of Aadhaar usage being made mandatory. Even where Aadhaar is not technically mandatory, there is a coercive element in the aggressive push to induce its adoption. In many states, Aadhaar is mandatory for LPG benefits and it has been mandatorily linked to the Jan Dhan accounts. Aadhaar has also been deployed for examinations, for availing scholarships, conducting medical tests, and for opening bank accounts. There is even a proposal to make it compulsory for registering to buy railway tickets online and the Indian Railways is reportedly considering selling the data it collects.

There is no doubt that Aadhaar is useful for plugging leakages in benefit transfers from the government and in the provisioning of multiple services. But, it is equally true that there are serious privacy concerns and a high risk of cybercrime and identity theft. There are multiple contempt petitions outstanding before the apex court regarding the violation of its interim orders, but due to the dilatory justice system, these petitions have not been listed yet. The government’s contention is that there is no fundamental right to privacy and successive governments have failed to legislate either a privacy law or a data protection act in the years since Aadhaar was first mooted in 2008. The SC is also yet to provide a final ruling on the issue of whether privacy is a fundamental right. In this context, an apparent violation of the SC interim order is disturbing.