UID/Aadhaar
“We gave birth to the State. We are sovereign. Will we be put on an electronic leash for our entire lifetimes”, asks Shyam Divan in SC hearing on Aadhaar
In more than an hour of fiery and impassioned arguments against that the government’s attempt to forcibly linked Permanent Account Number (PAN) to Aadhaar in the Supreme Court, lawyer Shyam Divan reminded the three-judge Bench that Aadhaar was conceived as a voluntary exercise. Mr Divan quoted the previous orders of the Supreme Court and said, “Look at the orders. The whole concept is voluntary. No one should suffer for not having an Aadhaar card.”
 
 
“Forced Aadhaar enrolment is fundamentally altering the relationship between State and individual. If from birth onwards, the State knows everything about you, will the relationship between State and individual remain the same?” he asked.
 
 
Mr Divan’s arguments were live-tweeted by the public-spirited Gautam Bhatia (@gautambhatia88), based on which we have put together this article.
 
Mr Divan read out the orders of 11 August 2015 and reminded the judges that this was supposed to be heard urgently. "You can't have a fait accompli situation… Let’s go back to 11 August 2015. We had made out a sufficient case to convince the three-judge bench that there are serious issues. It was in this context that the 11 August order had said Aadhaar shall only be voluntary.” Mr Divan argued that “when you refer to a larger bench, under our system, it will take a very long time to be heard. Three Chief Justices have come and gone. In effect, this case has been canned.”
 
 
Arguing strongly against the government, Mr Divan pointed out that “this is the first time that in any open society this kind of tagging is being done.”
 
Reading out 139AA of the Income Tax Act, Mr Diwan pointed out that the scheme under Aadhaar is in collision with the Income Tax Act. “The Aadhaar Act is voluntary. It contemplates free consent of citizens. If you choose not to apply for Aadhaar, you may not get something. Can you now make it mandatory?” he asked. “Everything from enrollment onwards suggests that you are volunteering for Aadhaar. You cannot engraft into the IT Act a voluntary scheme.”
 
   
Objecting to the government’s move to make it mandatory, he argued, “We are trying to avoid a totalitarian system, where a man becomes a number.” 
 
Mr Divan took the Court through the penal provisions that accompany loss of PAN and asked, “Why should I be deprived of selling or buying a motor vehicle (for which you need a PAN) because I don't want an Aadhaar? This is not a privacy argument. My physical body is mine.”
 
When Justice Sikri asked won't the same objections apply to PAN, Mr Divan argued that the level of intrusion is much greater in Aadhaar. “You can't take my body part as a condition of me exercising my rights. That is a Fustian bargain. Not permissible under the Constitution.” 
 
Justice Bhushan asked “What about passports?” Mr Divan replied that there is a legitimate interest there. If you want to travel abroad and something happens, you need to be identified. Mr Divan pointed out, “PAN is not intrusive of my body. My fingerprints are mine. Not the State's. As long as my body is concerned, the State cannot expropriate it without consent, and for a limited purpose.
 
 
Justice Bhushan queried regarding blood tests and DNA. Mr Divan repeated the point about compelling interest and limited role. Mr Divan pointed out examples of Aadhaar failures in Rajasthan and asked, “Are we a State that says that unless you give me your fingerprints, I will not give you a ration? Is the individual so subordinate to the State?”
 
Mr Divan then took the Court through the IT Act's provisions on personal data. “Personal data is of the person. It belongs to the person. And what does Article 21 protect, if not the body?” In a striking example, Mr Divan quoted the Identification of Prisoners Act, 1920 under which, if a person refuses, at worst, the court can draw an adverse inference. It can't compel.
 
 
Mr Divan cited Black's Law Dictionary and Ramanathan Iyer's law lexicon for the definition of ‘personal’ and argued that the Constitution is not a charter of servitude. “We are free citizens. You cannot invade my body without my consent.”
 
Mr Divan then read out the Preamble to the Constitution of India. “We the People... assuring the dignity of the individual adopt, enact, and give to ourselves this Constitution." The right to life covers the person's right to protect their bodily integrity. Mr Divan pointed out that under our Constitution, government must be limited. “A government directive cannot convert limited government to totalitarian government. A limited government is not compatible with tethering citizens to an electronic leash."
 
  • Among the other arguments made by Mr Divan:
  • The right to life includes the right to personal autonomy. What is personal autonomy? “At the very least it includes my body, my fingerprints, my autonomy.”
  • The right to life under section 21 read with 14 and 19 guarantees to all the enjoyment of fundamental rights.
  • The test for the constitutionality of a provision is whether its effect is to violate fundamental rights.
  • The effect in this case is severe penal consequences that impinge on personal autonomy. For what? Collecting taxes? Can't be done
  • This law has a discriminatory object. Mr Divan: “You are converting what is a right under the Aadhaar Act to a duty. That cannot be done.”
  • Under Article 14 the object of the statute cannot be discriminatory. The government’s move is discriminatory, because it creates two classes of assessees: those who have parted with their biometrics and those who refuse.
 
Mr Divan also pointed out the perils of relying on biometrics and how badly Aadhaar database is maintained and used. 
  • Some 34,000 operators making fake Aadhaar Cards have been blacklisted.
  • An RTI reply from UIDAI stating that 85 lakh Aadhaar numbers have been deactivated for duplication.
  • Fake Aadhaar Cards being found on people.
  • Huge trenches of data are being leaked into the public domain.
  • There have been massive public leakages of Aadhaar data.
  • Once all these websites are connected and linked, there is a serious apprehension of data being compromised.
  • German Minister's fingerprints were faked using a hi-definition photograph of her hand.
  • A hacker extracted the iris data of Angela Merkel.
 

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COMMENTS

Dinesh

2 weeks ago

Divan was being heard by a Bench of Justice A.K. Sikri and Justice Ashok Bhushan. Section 139AA, introduced through the Finance Act, 2017, provides for mandatory quoting of Aadhaar or enrolment ID of Aadhaar Download application form for filing of I-T returns and making application for allotment of PAN with effect from July 1, 2017.

Pranali Sharma

3 weeks ago

Today in India, Aadhaar Card in one of the major and important ID proof, which is primary and mandatory at every places, and government of India is taking big action to make Aadhar a very priority.

Rajgopal Jaju

4 weeks ago

Great Job Mr Divan

SuchindranathAiyerS

1 month ago

The subversion of law by the executive is as endemic as Judicial over reach in India. India's law makers, law enforcers and law upholders, the Legislators, the Police and the Judges are no different from a cleaner boy who drives a lorry on the Highway while the official driver is recovering from a hangover. Immature, corrupt incompetence in shoes far too wide for their feet wielding too much power.

As for Aadhar, it is already a fait accompli. The argument comes too late.

Ramesh Bajaj

1 month ago

Feeling scared.

Andrew Winston

1 month ago

India is blessed to have passionate advocates like Mr. Divan to protect us from the malignant scourge of megalomaniacal politicians. Three cheers to Mr. Divan!

Leslie Menezes

1 month ago

Wow to Mr Divan for doing a yeoman job to protect individual privacy. Woe to this bureaucracy for serving its interests and not the people. Do we need this feudal structure?

Rahul Pande

1 month ago

Lets keep quiet otherwise Gabbar will come.The less said the better.

Kamal Kant Mishra

1 month ago

Is India wishing to become a Police State ?

Kamal Kant Mishra

1 month ago

Aadhar linked with Google maps, Bank, Income tax - makes it Policing. Why ?

How to redefine and rebuild banks for emerging demands
Banks are basically meant to allocate capital to businesses and consumers efficiently. Post demonetisation, customers feel the pain more than gain in banks. Farmers getting inadequate and untimely credit from banks take to huge private debt, only to commit suicide later. 
 
Manufacturing micro and small enterprises, the seed beds of employment and entrepreneurship, are being shown the door by the banks, notwithstanding the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) guarantee up to Rs2 crore. Banks never went beyond the mandated Rs10 lakh guarantee cover for the medium and small enterprises (MSE). 
 
A large number of customers are slapped with irrational minimum balances in their accounts and levied of penalties at will. The Reserve Bank of India (RBI) is averse to regulate such actions on the excuse that micro-management of banks is not their role.
 
With over 38% of the population illiterate, Jan Dhan and Mudra Yojana, as instruments of financial inclusion, have only become compulsive agenda for the banking sector. Banks, public or private sector, have their eyes set only on profit. Such profits are dwindling with net interest margins declining following the growing non-performing assets (NPAs). 
 
Institutional innovations like the small payment banks, India Post and their likes, as also the micro finance institutes (MFI) have also proved inadequate to meet the banking needs of the population. 
 
Cashless banking leading to poor inflow of deposits during the last four months and cashless automated teller machines (ATM) demonstrate the erosion of faith in banking in India. Bad banking and good economy cannot co-exist and, therefore, it is imperative that innovative institutional solutions should be thought of.
 
The Indian economy, targeting double-digit growth, has competing clientele bases in the current milieu of banking. Domain banking has moved to high tech banking. Executives at counters have now become slaves of the machine instead of being masters. Public sector banks (PSB) have long back forgotten their purpose, with their owner proving no better.
 
The emerging context requires that banking is redefined to meet the specificities of farming, employment, entrepreneurship, infrastructure, and international finance as distinct entities. In fact, the Narasimhan Committee (1991) suggested consolidation and convergence of the PSBs into six banks to serve the needs of the service sector, to hold government securities and for retail lending; local area banks (LABs) to cater to farmers and small entrepreneurs; an international bank to cater to the needs of exports and imports. Development finance institutions, left untouched, would fund the infrastructure sector. The Financial Sector Legislative Reforms Commission (FSLRC) also echoed the same in its report. This is the time to look at the spirit of such recommendations and rebuild the banks to regain the fast eroding trust in the banking by the large customer base of this country. 
 
Kisan Bank
 
Breaking the nexus between the farmer and politician can happen only when there is mutual trust between the bank and the farmer. The farm sector, consisting of crop farming (organic, precision, and green technologies), dairy farming, shrimp farming, poultry farming, sheep farming and agricultural marketing, by itself is inherently capable of cross-holding risks, save exceptions like the tsunamis, severe drought for long spells and typhoons. It is only in the event of such natural calamities that a Disaster Mitigation Fund should come to the rescue. 
 
The existing commercial banks should shed this portfolio in favour of regional rural banks (RRBs) and merge all the rural branches with the RRBs. RRBs should be redesigned to take to farm lending in a big way – from farm machinery to crop farming and allied sectors -- on a project basis. Insurance plays a vital role in mitigating credit risk and, therefore, the insurance products should be redesigned and modified on the lines of the South Korean model. 
 
All the rural cooperative banks (RCB) could continue their lending to the farm sector, parallel to the RRBs, as the lending requirements are huge and farmers require multiple but dedicated lending institutions. 
 
The RBI has not been comprehensive in regulating the sector. It is better that the National Bank for Agriculture and Rural Development (NABARD) is restructured to play an exclusive refinance and regulatory role over the entire farm and rural lending, consistent with its purpose of formation. Its other functions like the Rural Infrastructure Development Fund (RIDF) can be relegated to a new institution hived off from the NABARD.
 
Udyog Mitra Bank
 
Nurturing entrepreneurship and promoting employment in manufacturing are moving at snail’s space in the Start Up, Stand Up and Make-in-India initiatives. The Prabhat Kumar Committee (2017) called for setting up a National MSME Authority directly under the Prime Minister’s Office (PMO) to correct the milieu. 
 
All the MSEs should be financed by dedicated MSE bank branches. All the existing SME branches should be brought under a new regulatory institution. Small Industries Development Bank of India (SIDBI) has disappointed the sector. It has to first consolidate all its funds into just five: incubation fund; venture capital; equity fund to meet the margin requirements of MSEs when and where required; marketing fund to meet the market promotional requirements; technology fund; and revival and rehabilitation fund. 
 
SIDBI should reshape into refinance and regulatory institution for the MSME sector with focus on manufacturing and manufacturing alone. It should divest its direct lending portfolio to avoid any conflict of interest. Its present lending to real estate and non-manufacturing MSME lending should be transferred to the commercial banks. RBI, which is not currently able to cope with the regulatory burden of this sector, can transfer it to SIDBI,
 
Vaanijya Banks (Commercial Bank)
 
All the existing commercial banks – both in the public and private sector – would do well confining themselves to project finance, lending to real estate, services sector, housing, exports and imports etc. All the banks should constitute, at the board level, a sub-committee on development banking to work on the transition arrangements to the above functionality. 
 
Maulika Vitta Vitarana Sanstha (Infrastructure Bank)
 
Huge NPAs have grown from the practice of lending long with short-term resource base, coupled with lack of experience in assessing the risks in lending for infrastructure projects. ‘All the perfumes of Arabia’ (RBI’s structural debt restructuring solutions) did not cleanse the bloody hands of banks. It is time to revisit the universal banking model and re-establish an Infrastructure Bank to fund the infrastructure projects and logistic parks. 
 
These measures would help achieving growth like never before.
 
RBI and government of India could constitute a high level committee to work on the modalities for transiting to the new structural transformation of the financial sector.
 
(Dr B Yerram Raju is an economist and risk management specialist.

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COMMENTS

B. Yerram Raju

1 month ago

The comment below seems to relate to article on AADHAR .

B. Yerram Raju

1 month ago

The comment below seems to relate to article on AADHAR .

B. Yerram Raju

1 month ago

The comment below seems to relate to article on AADHAR .

B. Yerram Raju

1 month ago

The comment below seems to relate to article on AADHAR .

B. Yerram Raju

1 month ago

The comment below seems to relate to article on AADHAR .

B. Yerram Raju

1 month ago

The comment below seems to relate to article on AADHAR .

B. Yerram Raju

1 month ago

The comment below seems to relate to article on AADHAR .

B. Yerram Raju

1 month ago

The comment below seems to relate to article on AADHAR .

B. Yerram Raju

1 month ago

The comment below seems to relate to article on AADHAR .

B. Yerram Raju

1 month ago

The comment below seems to relate to article on AADHAR .

B. Yerram Raju

1 month ago

The comment below seems to relate to article on AADHAR .

B. Yerram Raju

1 month ago

The comment below seems to relate to article on AADHAR .

B. Yerram Raju

1 month ago

The comment below seems to relate to article on AADHAR .

B. Yerram Raju

1 month ago

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B. Yerram Raju

1 month ago

The comment below seems to relate to article on AADHAR .

The Ant Grows into an Anthill
When we first featured the ant (The Action Northeast Trust), in 2006 (Moneylife, issue dated 7 December), it was a fledgling organisation struggling, as all not-for-profits do, with issues of replicability and sustainability. 
 
But, having survived the unprecedented ethnic violence at the turn of that decade, when most of its staff and volunteers had to live in relief camps, it decided to redouble its development efforts. Reflecting an unflinching faith in one’s cause, the ant’s annual report of that year said, “The next few years will be critical for the ant as we struggle to remain humane … The trauma was real but so was the learning and healing. We hope we have become better human beings and also stronger as an institution...”
 
The ant then spun off some of its self-sustaining activities into separate organisations in order to make it self-reliant and less dependent on grants and donations. By 2005, it had set up Aagor Daagra Afad (ADA), a women-weavers’ collective for weaving and marketing of Bodo handlooms. It was an unprecedented success and doubled sales every year for the first six years. ADA then aspired to enter the retail market. Thus was born The Ants Store in Bengaluru, in 2007—a retail initiative to showcase northeast handlooms and crafts and to generate revenue to sustain livelihoods of people from that region. It also works at integrating northeast communities into mainstream India by highlighting their craft and culture.  
 
The Ants Craft Trust (TACT) evolved from The Ants Store. Smitha Murthy, designer and founder trustee of ADA says, “We could boost artisans’ confidence in their craft only if we could market their goods at a price that earned them fair wages. To create the market was a challenge and we thought Bengaluru had the right mix of population—young IT professionals with high disposable incomes and eclectic tastes.” In 2009, the reins of The Ants Store were taken over by TACT, which is registered as a trust, although not exempt from income-tax.
 
TACT’s objectives are in line with those of its parent organisation: a) to preserve and promote the social and economic well-being of weavers and crafts persons, especially tribals; b) to promote a positive identity for the entire northeast region, increase livelihoods in rural northeast, accelerate sustainability of the northeast crafts groups and to promote positive stories above its many diverse communities.
 
TACT had a young design team that worked (now, taken over by The Ants Craft Private Limited) with traditional crafts groups, infusing design innovations into their work. Traditional motifs are woven deftly on simple looms, but cater to urban lifestyles and contemporise their traditions. The designers’ inputs ensure that the craft survives and thrives. 
 
To a question about why TACT changed to The Ants Craft Pvt Ltd, Smitha says, “We soon found that our charter as a trust came in the way of our getting bank credit for working capital. And our income-generating activities came in the way of our getting a tax-exemption certificate , as a trust.” So, instead of falling between the two stools,  where the vulnerable artisans were the ones who would suffer, we decided to convert the structure of the organisation to an enterprise. Hence, The Ants Craft Pvt Ltd was incorporated on 18 March 2014 with a seven-member board of directors. Dr Sunil Kaul, one of the founder trustees of the ant and of TACT, is the chairperson of the board of directors. The board ensures that TACT’s trustees and employees hold more than 50% of the shares.
 
TACT is a great case study of an NGO spawning a social enterprise that has remained true to core objectives. As Dr Kaul says, “An ant doesn’t get overawed by any obstruction. It tries to find a way around the obstruction, to reach its destination!” You can support TACT by buying and promoting its products.
 

 

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