Highlights on Aadhaar and other Laws Amendment Bill


The Aadhaar and Other Laws (Amendment) Bill, 2019 was introduced by electronics and IT minister Ravi Shankar Prasad in the Lok Sabha on 24 June 2019. It substitutes an Ordinance proclaimed on 2 March 2019. Later, the Rajya Sabha passed “The Aadhaar and Other Laws (Amendment) Bill”, on 8 July 2019.
On 24 July 2019, the Union Cabinet sanctioned the amendments to Aadhaar and Other Laws (Amendment) Bill, 2019.  A bill to admit voluntary use of Aadhaar card as an identity proof of the person to open a bank account and to procure mobile phone connections was passed. 
The bill, which has become an Act, attempts to amend the Aadhaar Act, 2016 and further to amend the Prevention of Money-laundering Act, 2002 and the Indian Telegraph Act, 1885. The Aadhaar and Other Laws (Amendment) Act, 2019 builds the base for permitting the usage of Aadhaar by private organizations in spite of a Supreme Court ruling in September 2018 that Aadhaar can be used only for welfare schemes and for delivering state subsidies.
The amended Act lays encumbrance on offline verification of Aadhaar holders where the person will be verified via offline methods and no need for any submission of biometric or demographic information to the UIDAI or Unique Identification Authority of India’ s data servers. According to the Aadhaar and Other Laws (Amendment) Act, 2019, offline verification means the procedure of verifying the Aadhaar number holder without authentication and it can be done through offline modes as specified in the rule and regulations.

Following are the highlights of the Aadhaar and other Laws Amendment Bill 

Voluntary use of Aadhaar

The Aadhaar and Other Laws (Amendment) Act, 2019 evidently state, “Every Aadhaar number holder to establish his identity, may voluntarily use his Aadhaar number in physical or electronic form by way of authentication or offline verification, or in such other forms as may be notified, in such manner as may be specified by regulations.” The Aadhaar Act allowed for the use of an Aadhaar number as the identity proof of an individual and it is subjected to authentication.  However, the Supreme Court, concerning the privacy-related issues and fear of exclusion, ruled the usage of Aadhaar was not mandatory to utilize various services and benefits. The amended Act substitutes this provision to state that a person may voluntarily use his or her Aadhaar number as their identity proof, by offline verification or authentication. It clearly states that validating the authenticity of an individual’s identity proof via Aadhaar number, for availing any service or benefits, may be made mandatory only by a law of Parliament.

Usage of Aadhaar number for state welfare schemes 

With positive nods from the Cabinet to the Aadhaar and Other Laws (Amendment) Act, 2019, it states that now aadhaar number can be able to be used for their respective welfare schemes. The provision will enable the states to adopt the Centre’s model of using the Aadhaar number for direct benefit transfer (DBT). With the Aadhaar and Other Laws (Amendment) Act, 2019, the words “or the Consolidated Fund of the State” have been included after the words “the Consolidated Fund of India”, in the title of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016.

Offline verification of Aadhaar number holders

As per the principal Act, Aadhaar ‘authentication’ may swear a particular person’s identity.  This process involves submitting the Aadhaar number, and their biometric or demographic information to the data servers of the UIDAI or Unique Identification Authority of India for verification. In addition, the amended Act allows ‘offline verification’ of a person’s identity proof (Aadhaar), without authentication, via offline modes as specified by regulations of the Unique Identification Authority of India (UIDAI). In the offline verification process, the agency must get the permission of the individual to use or store Aadhaar number or biometric information and also they should inform the individuals about the alternatives of sharing information, and not collect, to store or to use the Aadhaar number of an individual.

Introduction of Aadhaar ecosystem

The term “Aadhaar ecosystem” actually was not a part of the Act but it has been included with the latest amendment in a move to lay the way for offline verification. The amended Act states that the Aadhaar ecosystem includes requesting agencies, enrolling agencies, and offline verification-attempting organizations. The Unique Identification Authority of India – UIDAI provides the directions to them, depending on the need, for the completion of its verification process or functions under the Act. 

Deletion of section 57 of the Aadhaar Act

Section 57 of the principal Act “state or anybody corporate or person” allowed the individual to use the Aadhaar number for demonstrating their identity has been omitted. This happened after the ruling of the Supreme Court in September which state “Aadhaar can only be used for welfare schemes and for delivering state subsidies. It excludes the private companies or entities from using Aadhaar data for the verification process of their customers”. Nevertheless, with amendments to the Indian Telegraph Act, 1885 and the Prevention of Money-laundering Act, 2002, companies related to telecommunication and banks have been allowed to use Aadhaar for the verification process of its customers after getting the permission for the option.

UIDAI – Unique Identification Authority of India Fund 

As per the principal Act, all revenue and fees collected by the UIDAI were to be credited to the Consolidated Fund of India.  The amended Act takes out this provision and created the Unique Identification Authority of India fund in which all fees, revenues, grants, and charges received shall be credited.  This fund shall be utilized for expenses of the UIDAI, such as allowances and salaries of its employees.

Cancellation of Aadhaar

The amended Act allows the Aadhaar holders an option to apply for cancellation of their Aadhaar number, within six months of reaching 18 years of age. Before, a young adult had no option or provision to apply for cancellation of their Aadhaar number. However, same to remaining adults too, they also had no provisions to apply for cancellation of their Aadhaar card out of the system and get all the data so far compiled, deleted by banks and other authorities.


As per the amended act, the penalty for usage of identity information of a person without official authorization by bespeaking organization or offline verification process attempting entity shall be punishable with imprisonment to the extent to 3 years or may extend up to ten thousand rupees of penalty. The penalty in the case of a company may extend to one lakh rupees and punishable with imprisonment. 
Earlier, according to the principal Aadhaar Act, it was mandatory that courts will take cognizance of any offence penal under it, only if the complaint was made by UIDAI or any officials or person authorized by UIDAI. After the amendment, the court will have to take cognizance of the offence even if a complaint is made by any individual who is holding an Aadhaar number. 
According to the amended Act, a civil penalty will be imposed on entities that violate the provisions under the Aadhaar Act, and the penalty is up to ₹1 crore with an additional penalty of up to ₹10 lakh each day in case of ceaseless non-compliance.
As per the amended Act, the UIDAI may hold the rights to file a complaint against an organization or an entity in the Aadhaar ecosystem for not attempting to (i) comply with the Act or the UIDAI’s directions, and (ii) furnish information required by the UIDAI.  Deciding Officers who were appointed by the UIDAI shall adjudicate such matters, and may enforce penalties to the concerned entities, and the penalty amount extends up to one crore rupees. The Telecom Disputes Settlement and Appellate Tribunal shall be the concerned authority against decisions of the Adjudicating Officer.

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