in Finance

My social media news feed greeted me this morning with an article flagging the Aadhar as a dark concept right out of an espionage movie. Most of the negative sentiments to Aadhar seems to come from affiliating it with a political agenda; and that is the worst thing to befall a piece of technology.

Aadhar is a newfangled concept in the Indian eco-sphere and as such could revolutionize the Unique ID predicament much like how e-mail revolutionized communication in academe. But, the fact remains, that Indian internet regulations and laws around individual privacy and security are nascent if not under-defined. Which is why it becomes important to understand the concept of Aadhar from a neutral perspective, devoid of all the clutter that it is presently enshrouded in.

Let’s lay this matter to rest by trying to understand what the Aadhar is all about. It’s possible uses, benefits, concerns and potential use case scenarios. The post shall aim to dissect the Aadhar from a technological standpoint.


What is an Aadhar Card?

Aadhar is a 12 digit unique ID number issued by the government to every ‘resident’ of India. This is not a replacement for existing identification documents, but can be used as a stand alone ID proof for various purposes.

What makes the Aadhar unique from other ID proofs is it’s standardization across the country, as opposed to Driving Licences; the integration of biometric & demographic information and the robust digitized database that can be integrated with multiple platforms for ID verification.

The Aadhar is being developed by the Unique Identification Authority of India (UIDAI), which issued Aadhar numbers and manages the Aadhar platform. The UIDAI functions under the Planning Commission of India.

What Makes it Unique?


The Aadhar comes packed with a unique set of features that makes it distinct from the other ID proofs out there. There are multiple ID cards out there at the moment, some of them are issued by the state governments while others are issued by the central government. ID proofs like Passport and PAN card have a standard format to them, but others like DLs and Rations cards can vary from state to state. Plus none of them actually hold more information than your name and picture. Here’s what makes the Aadhar stand out-

Features Aadhar Other ID Proofs
Unique ID Yes Yes
Physical card required for Verification No Yes
Photo on the Card Yes Yes
Biometric and Demographic info included Yes No
Can instant e-Kyc be performed? Yes No
Seamless integration with multiple platforms? Yes No
Used to Make Financial Transactions Yes No
Potential Possibility to fake No Yes

What is the Cause for Concern?

The cause for concern comes from the fact that Aadhar stores your personal information such as your fingerprint, place of residence and other biometric data. The allegation is that the government freely distributes this information to any solution provider that wants to integrate with the Aadhar database.


Now, while this may be a concern in the future when your Aadhar number is linked to a host of personal information such as your medical records, education details, employment information and criminal records, it warrants nothing but mere observation at the moment. Aadhar implementation is still in trial mode in India.

Small Background

Aadhar was initially implemented as a source of ID proof for those sections of rural India, that did not have any other identification proofs. The Aadhar solved the predicament by building a central repository with crucial information about the Aadhar holder such as their fingerprint and eye scans. This made the Aadhar fool-proof and impossible to fake.

Any institution that wanted to conduct a KYC process, need simply verify the Aadhar number of the person against the central depository and get the required information. This process was of vital importance for banks in being able to lend credit to poorer sections of the society.

But the use of Aadhar has transcended this and now holds potential for being a National ID.

Aadhar Benefits

The benefits of Aadhar are manifold and there is no restriction on the avenues in which it can be deployed. There are so many more possibilities to Aadhar than merely the subsidies they provide. Post demonetization, Aadhar has gained a significant advantage in being a payment partner for cashless transactions.

  • Used for e-Kyc verification by multiple parties such as Paytm, banks and other institutions.
  • Can be linked to your bank account to engage in cashless payments with Aadhar-pay.
  • Standardized and Unique ID for all residents across India.
  • Impossible to replicate or fake thus promising enhanced security and trust.
  • Availing of government subsidies has never been easier.

A Bite of Progress

A good analogy to the Aadhar would be the social security number employed in the US for its residents. The social security number is an all inclusive unique ID issued by the government to every resident of the USA. The social security number is linked to a person’s medical records, education history, personal information and much more.

There is no unwarranted paranoia about having to use the SSN every time you apply for a new phone connection, or apply for a new job or want to check in at a hotel or hospital. To be fair the SSN holds more valuable information than what the Aadhar does at present.

But to be fair to everyone, the Aadhar is still in its nascent stages of implementation in India and quite frankly, there are graver concerns in India that need attention, not the least of which is misuse of personal information on the Aadhar.

The Ideal Method

We have a long way to go before the Aadhar can become a cause of concern for privacy misuse. But looking ahead into the future, the use of Aadhar should be regulated and controlled by one central authority, quite possibly the UIDAI.

We have a long way to go before the Aadhar can become a cause of concern for privacy misuse. Click To Tweet

The UIDAI should be able to decide who gets what level of access and information about a person from their Aadhar number. Having such a regulatory body in place will ensure that misuse of Aadhar information is avoided. A scenario close to how it plays out in the USA.

General Misconceptions

  • Aadhar is for Indian citizens: Not necessarily. Any ‘resident’ of India can apply for an aadhar.
  • Aadhar is a card that you need to carry: Not necessarily. Aadhar is a 12 digit number and that is what holds the value. Aadhar can also act as a photo proof should you choose to. However in essence it is the 12 digit number that does the trick for all intensive verification purposes.
  • Aadhar is a replacement for existing IDs: No Aadhar is a standalone concept for Identification and is not a replacement for existing ID proofs. The Aadhar merely provides flexibility and enhanced verification/ authentication experience.

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