DNA Edit: Trump card to curb tax evasion, Aadhaar needs legislative safeguards

The central government’s decision to make the Aadhaar number mandatory while applying for PAN cards and filing income tax returns is a welcome move. In the same breath, it must be added that the privacy of Aadhaar card holders must be secured and the data not made available to any agency or for any purpose that violates the constitutional rights of citizens. It is interesting that the central and state governments and private entities like schools and other establishments are going ahead full steam with making the Aadhaar card mandatory despite the Supreme Court’s orders to the contrary. There is recognition that the Aadhaar number and its associated biometric data is a powerful tool to prevent fraud, check leakages, establish identity, implement digital payment and authenticate systems.

The decision to mandate the Aadhaar number for income tax returns and PAN cards is important in helping the Income Tax department to put its data analytics tools to use to track transactions across bank accounts and verify the declarations on income, expenditure, and assets acquisition which are made in tax returns. It will help check tax evasion and fraudulent declarations and save tax officials the difficulty or impossibility of manually scanning the declarations for undervaluation and non-declaration. The seeding of the PAN card database with Aadhaar data will also help the income tax department eliminate duplication and the alleged practice of unscrupulous individuals securing multiple PAN cards across which they distribute expenditure, properties and bank accounts to minimise their taxable income. Earlier, there was no way for the income tax department to weed out such duplication.

However, the Aadhaar database is not without its problems. Many instances are being reported of individuals who lost their Aadhaar cards and do not recall their numbers not being able to find their Aadhaar data through a scan of their fingerprints which is supposed to be unique. If an individual is able to own multiple Aadhaar cards and numbers it defeats the purpose of the technology. Heavy manual labour tends to efface fingerprints. Of course, the iris scans offer another layer of unique identity data. There have also been allegations of data theft but the Unique Identification Authority of India (UIDAI) has conclusively rejected this charge. Earlier this month, the UIDAI claimed to have transacted 400 crore Aadhaar authentication requests without any blemish and helped the government save Rs 49,000 crore while making direct benefit transfers.

The fear that Aadhaar will become a surveillance tool in the hands of the government is a worrying prospect. A legislation providing statutory cover to Aadhaar and rules regulating its usage would have offered clarity and helped allay such fears. The failure of the earlier UPA and the present NDA government to introduce a UIDAI law is unacceptable. Such a powerful system that is dictating the lives of every citizen in the country in multiple ways but operating without constitutional or statutory cover is a sad commentary on the state of parliamentary accountability. The judiciary has shown ample patience in allowing the executive and Parliament to get its act right but this is being misinterpreted as pliability. There is no doubt that Aadhaar facilitates the goal of enshrining financial probity and efficient governance. While the government’s crackdown on black money is praiseworthy the failure to legislate on Aadhaar is a cause for concern.