Money & Banking
Little-noted provision of Companies Act gives NBFCs parity with banks

The Companies Act 2013 has several provisions which are reactive–reactions to recent corporate scandals in India and elsewhere hence, the statute is laden with lethal powers of prosecution, may be abused to a large extent

A little-known provision of the Companies Act, 2013 gives non-banking financial companies (NBFCs) parity with banks. This will have far reaching consequences as NBFCs will be able to charge borrowers with “fraud provisions” of the Companies Act if the borrower has induced the lender to lend money by supplying misleading information. There are serious implications of fraud under the Act, with imprisonment for at least six months but going up to 10 years. Not only this. Since auditors of NBFCs are mandatorily required to report fraud, NBFCs may effectively force the auditors to report the fraud to the MCA.

This article opens up this little known mystery.

Genesis of the provision:

The genesis of the new-found parity granted by Companies Act to NBFCs is a newly inserted definition of “financial institution” in section 2 (39) of the Act, whereby financial institution is defined to include a bank, or any “financial institution defined or notified under the RBI Act”. At first blush, one would have thought, the financial institutions defined under the RBI Act would include public financial institutions such as the IFCI or IDBI of yester-years. However, if one sees the definition of “financial institutions” in section 45I (c) of the RBI Act, read with section 45I (e), the definition clearly covers non-banking financial companies.

 Therefore, there is no doubt that the expression “financial institutions” under the Companies Act 2013 includes not only banks but also financial institutions.

Fraudulent inducement to lend money:

Let us now see an innocuous looking provision in section 36 of the Companies Act. The section deals with fraudulent inducement to invest money. The section provides for prosecution for fraud, if any fraudulently induces an investor to lend. The language of the law uses words “knowingly or recklessly makes any statement, forecast or promise, which is false, deceptive or misleading, or deliberately conceals any material facts”.  The section is to be applied where promoters may have made false or misleading statements and induced investors to invest money by making tall claims.

Large part of the section has been there in the Companies Act 1956 as well – however, there is an interesting addition here – it now includes not only investments by shareholders, by also includes credit facilities by banks or financial institutions. So, read in context of credit or borrowing facilities, if any person (obviously persons in charge of management of the company) knowingly or recklessly makes any statement, forecast or promise, which is false, deceptive or misleading, or deliberately conceals any material facts, and thereby induces a bank or NBFC to lend money to the company, such person is liable for fraud provisions of section 447.

Use of Fraud provisions by NBFCs:

The Companies Act 2013 is heavily loaded with provisions dealing with fraud. It has over 300 references to fraud, and introduces section 447 which fixes a minimum imprisonment of 6 months, going upto 10 years, and a monetary fine of at least the amount involved in fraud, going upto 3 times the money.

The Act is laden with anti-fraud measures. The Serious Frauds Investigation Office, almost equivalent of a corporate CBI, is equipped with powers to arrest without warrant, and the offence is non-bailable. The auditor of the company has mandatorily to report frauds to the MCA if he has “reasons to believe that a fraud exists in relation to the company”.

Having been defined as a ”financial institution”, enjoying parity with banks, NBFCs may, therefore, make a case, under appropriate circumstances,  that the borrowers made deliberately false or misleading statement to induce the NBFC to lend or grant a credit facility. Therefore, the borrower, or officers of the borrower, should be liable to charged with fraud. The prospect of fraud reporting, or fraud prosecution, will be strong enough deterrent for a borrower to listen to an NBFC very seriously.

Other implications of bank-NBFC parity:

The newly granted parity with banks as “financial institutions” has several other implication for NBFCs too.

First of all, if there is a default in payment of a credit facility to a bank or NBFC, a company is prohibited from doing any buyback of shares. This is section 70.

Second, the provisions for appointment of nominee directors, as a part of lending contracts, now extends to NBFCs too, if the requisite power is there in the loan agreement.
That is to say, where the loan agreement empowers, an NBFC may appoint its nominee on the board of the borrower company.

While the newly-inserted parity is a great status-booster for NBFCs, equating borrower-lender disputes with frauds undermines the gravity with which the word “fraud” is associated. Needless to say, the Companies Act 2013 has several provisions which are reactive – reactions to recent corporate scandals in India and elsewhere – hence, the statute is laden with lethal powers of prosecution, which may be abused to a large extent.


(Vinod Kothari is a chartered accountant, trainer and author. He is an expert in such specialised areas of finance as securitisation, asset-based finance, credit derivatives, accounting for derivatives and financial instruments and microfinance. He has written a book titled “Securitisation, Asset Reconstruction and Enforcement of Security Interests”, published by Butterworths Lexis-Nexis Wadhwa.)


The potential for a surprise from RBI is high due to multiple policy levers: Nomura

RBI is likely to downgrade its FY14 (year ending March 2014) GDP growth forecast to 5% y-o-y from 5.5% and raise its WPI inflation forecast to 6.5% by March 2014 from 5%, says Nomura in its research note


With inflationary pressures resurging and FX volatility subsiding, Nomura expects a

25bp repo rate hike to 7.75% and a 25bp cut in the marginal standing facility rate (MSF) to 8.75%, according to a Nomura Fixed Income research note. It expects the MSF to leave the operative rate unchanged. If the RBI decides to make repo rate the operative rate immediately, then Nomura believes it would be accompanied by a 50bp repo rate hike. RBI has its monetary policy review meeting tomorrow (29 October 2013).


Nomura expects the RBI to downgrade its FY14 (year ending March 2014) GDP growth forecast to 5% year-on-year from 5.5% and raise its WPI inflation forecast to 6.5% by March 2014 from 5%.


The potential for a surprise at the RBI’s monetary policy meeting scheduled tomorrow (29 October) is high due to multiple policy levers: a 0, 25 or a 50bp hike in the repo rate, a 0, 25 or a 50bp cut in the marginal standing facility rate and changes to the borrowing cap under the liquidity adjustment facility or the term repo facility, which could determine whether the repo rate is made the operational rate, according to Nomura.


FY14 has started on a slow note, with growth at a dismal 4.4% y-o-y over the first quarter (Apr-Jun). Furthermore, private domestic demand remained sluggish in Q2 FY14, which suggests downside risks to the RBI's growth forecast. Nomura expects the RBI to sound cautiously optimistic on growth revival and therefore believe a reduction to below 5% is unlikely, as it expects good monsoons, better exports and an investment revival ahead.


Despite its increased focus on CPI (consumer price index) inflation, the RBI still officially, only projects WPI (wholesale price index) inflation. Since the September policy meeting, when the RBI set its WPI inflation projection at 5% by March 2014, the economy has been hit by a significant food (vegetable) price shock. Even if food inflation moderates, the pass-through of past currency depreciation suggests there are upside risks to WPI inflation. Therefore, Nomura expects the RBI to revise its March 2014 WPI inflation forecast up to 6.5% year-on-year from 5%.


Technologies and technology companies are beyond regulation? -Part 7

An exercise in rewriting and engineering the electoral ecosystem underlines that the use of biometric technology and electronic voting machines or EVMs is not as innocent and as politically neutral as it has been made out to be

As part of Government’s plan A, it appears that biometric-based Aadhaar/unique identification (UID) number was and remains an attention diversion exercise. The concerned authorities seem to have known that when its legality will be challenged, it will most likely be halted. This has happened in other countries. As part of their Plan B, the real work is being done by Ministry of Home Affairs (MHA). What is happening is that one institution, MHA will have Census data, National Population Register (NPR) data, National Intelligence Grid (NATGRID) data and the National Counter Terrorism Centre (NCTC) data-their integration is creating world's most powerful database since mankind came into existence.

Mere opposition to NCTC by non Congress governments is hardly sufficient because with NPR, NATGRID and UID alone they can do what Indian National Congress (INC) led Government wants without NCTC. NCTC is proposed in compliance with an illegal UN Security Council Resolution of 28 September 2001. India's cooperation was enlisted by co-opting Permanent Representative of India to the UN.

NCTC like a number of other related initiatives such as NATGRID, Unique Identification Authority of India (UIDAI) and Registrar General of National Population Register (NPR) is being established through governmental notifications or subordinate legislations rather than legislation passed in Parliament in manifest contempt towards legislatures, States and citizens’ democratic rights. 

Even Julio Ribeiro, the Mumbai police chief, who has vast experience with both state-level and counterterrorism policing argues, “NCTC is not required. Improve whatever is there on the ground, get them to act, and co-ordinate”.

Ministry of Home Affairs notified the setting up of the anti-terror body called NCTC on 3 February 2012 through National Counter Terrorism Centre (Organisation functions Powers and Duties) Order 2012. NCTC is headquartered in New Delhi. It is supposed to have the power to carry out operations including arrest, search and seizure. It will draw its functional power of search and seizures under the provisions of the Unlawful Activities (Prevention) Act (UAPA), 1967 and amendments therein. It is supposed to work as an integral part of Intelligence Bureau (IB). The notification mandates the terror-fighting agencies to share their inputs with NCTC and it also appoints the director and his core team. Director of NCTC will have full functional autonomy and he will have the power to seek information on terror from National Investigation Agency (NIA), NATGRID, intelligence units of CBI, National Technical Research Organisation (NTRO) and Directorate of Revenue Intelligence (DRI) in addition to all seven central armed police forces including National Security Guard (NSG). He will report to the IB chief and the MHA. The notification was issued under the Article 73 of the Constitution of India.

Expressing concern about the conspiracy of the non-state actors that disturbs the confidence of ‘global investor’, the 121 page 2009 report of the Task Force on National Security and Terrorism constituted by the undeclared undemocratic political party of pre-independence times - Federation of Indian Commerce and Industry (FICCI)-refers to assassination of Austrian Archduke Franz Ferdinand on 28 June 1914 by Gavrilo Princip, a Yugoslav nationalist, as a terrorist act that led to World War I. This war narrative runs all through the report that explicitly recommends the evolved framework of counter terrorism in the US, UK and Israel and commissioning of safe city plan by companies at page 96.

The fact is politically powerful members of the Serbian military armed and trained Princip and two other students as assassins and sent them into Austria-Hungary for the act.  The reasons for the war goes deeper, involving national politics, cultures, economics, and a complex web of alliances and counterbalances that had developed between the various European powers since 1870, including previous economic and military rivalry in industry and trade. FICCI report is quite shallow and deals with selective historical facts. It refers to possible targeting of Indian, Western and Jewish installations as retaliation against ongoing North Atlantic Treaty Organisation (NATO), a 28-nation military alliance led operations in Afghanistan. It contends that the link between Afghanistan and Jammu & Kashmir (J&K) is permanent.   

At page 70, the FICCI report argues for a secure E-network for connecting all district headquarters and police stations NATGRID under National Counter Terrorism Agency. It observes, “As Nandan Nilekani goes into operationalising the UIDAI, there is a case for factoring inclusion data as part of the national grid to assist in counter terrorism.” This is not the first time that NATGRID and UID link is underlined. Another joint report of the Associated Chambers of Commerce and Industry (ASSOCHAM), an undeclared political party of companies and KPMG, Swiss Consultancy titled “Homeland Security in India, 2010” had revealed it. ASSOCHAM’s joint report of June 2011 with Aviotech, an initiative of the promoters of the Deccan Chronicle Group titled “Homeland Security Assessment India: Expansion and Growth” refers to the “The requirement in Biometrics for all the subsequent programs under the National Census will become significant. This shows where the NPR program which is linked to UID is headed.


It is noteworthy that the origins of the UID and Radio-Frequency Identification (RFID) process within the US Department of Defense started under Michael Wynne, former Under Secretary of Defense for Acquisition, Technology and Logistics (AT&L) from 2003 till 2005. Within NATO, two documents deal so far with unique identification of items. The first one is standardization agreement, which was ratified in 2010. The second one is a “How to “guide for NATO members willing to enter in the UID business. Is India a NATO member? It appears to be behaving like one.


In such a backdrop, the most recent proposal of both the Election Commission of India (EC) and the UIDAI to MHA “to merge the Election ID‚Äącards with UID” is an exercise in rewriting and engineering the electoral ecosystem underlining that the use of biometric technology and electronic voting machines (EVMs) is not as innocent and as politically neutral as it has been made out to be. This proposal makes a mockery of the recommendations of the Parliamentary Committee on Finance on UID Bill. It is noteworthy that all EVMs have a UID as well. Notably, proposed Land Titling Bill makes a provision for linking land titles to UIDs of Indian residents. These acts of convergence is undermining the constitutional rights and change the meaning of democracy as we know it.


It is an act of changing both the form and content of democracy and democratic rights in a new technology based regime where technologies and technology companies are beyond regulation because they are bigger than the government and legislatures.      


At page 92 of the FICCI report, it is acknowledged that Government of US has made concerted efforts to leverage IT as a weapon against terror and has spent billions of dollars on IT related projects. These projects include common information exchange, systems for mining data from collection of unsorted documents and databases, biometric identity cards etc. Launched in April 2010, World Bank’s e-Transform Initiative that is working to converge private, public and citizen sector with an explicit ulterior motive to transform governments beyond recognition fit into the scheme of US IT efforts.   

The report seeks role of private sector in fighting terror. It underscores a “National Counter Terrorism Architecture”. It recommends ‘National Counter Terrorism Agency with all India jurisdiction as a central system for intelligence gathering, analysis and dissemination of information’. It approves of the ‘formational of National Intelligence Grid as an integrated model of information sharing under the proposed National Counter Terrorism Agency’ as ‘an urgent imperative.’ At page 49, the report refers to UN Security Council Resolution 1373 adopted in September 2001 for initiating action if tangible evidence exists. It recommends intense attack should a Mumbai style attack happen again as a hard option and joint military interaction and economic free trade zone as a soft option. 

A perusal of the report gives the impression that given the fact that objections of Chief Ministers and members of Parliament (MPs) are not rooted in concerns for civil liberties, they are simply interested in getting the MHA to stop the misuse of Intelligence Bureau, which has also been recommended by the FICCI report. Concerns of citizens and progressive political parties are based on the grave threat potential of NCTC, NATGRID, NPR, UID/Aadhaar, RFID and DNA Profiling Bill for democratic rights which are under assault from both the central and state governments. What else can explain the studied silence of most of the Chief Ministers in the matter of biometric profiling through UID/Aadhaar and NPR that has been rejected by the Parliamentary Standing Committee on Finance. UID/Adhaar, NPR and NATGRID and NCTC are two sides of the same coin. They are two ends of the same rope. They pose an unprecedented threat to constitutional rights and the federal structure of the country. 

MHA’s NCTC meets FICCI’s demand and is obstinately reluctant to pay heed to the demands of citizens, Chief Ministers and opposition MPs and even MPs from United Progressive Alliance (UPA).  

The Indian NCTC is a poor imitation of USA’s National Counter Terrorism Center (NCTC). US NCTC was formed in 2003. It is a governmental organization responsible for national and international counter terrorism efforts that advises government of US on terrorism. It works under USA’s Director of National Intelligence which operates on an annual budget of $49.8 billion and about 1,500 people. It draws experts from the CIA, FBI, the Pentagon, and other agencies, who try to ensure that clues about potential attacks are not missed. Matthew G Olsen was sworn as the Director of NCTC after his appointment was confirmed by the US Senate. He reports to the Director of National Intelligence and to the President of USA. In his earlier assignment, he has supervised the implementation of the Foreign Intelligence Surveillance Act.

USA’s NCTC is headquartered in McLean, Virginia. The precursor organization of NCTC, the Terrorist Threat Integration Center established on 1 May 2003, was created by the President of US by an executive order. It was established in response to recommendations by the ‘National Commission on Terrorist Attacks upon the United States’ that investigated the terrorist attacks on 11 September 2001. The Intelligence Reform and Terrorism Prevention Act of 2004 renamed Terrorist Threat Integration Center to NCTC and placed it under the US Director of National Intelligence. NCTC analyzes terrorism intelligence (except purely domestic terrorism), stores terrorism information, supports USA’s counter terrorism activities using information technology, and plans counter-terrorism activities as directed by the President of the United States, the National Security Council, and the Homeland Security Council.

India and US signed Counter Terrorism Cooperation Initiative on 23 July 2010. It was initialed on the sidelines of the visit of Dr Manmohan Singh to the US in November 2009. The then Union Home Secretary, GK Pillai signed for India whereas Ambassador Timothy J Roemer signed on behalf of the US. Nirupama Rao, the then Indian Foreign Secretary, was also present on the occasion. It seeks to further enhance the cooperation between two countries in Counter Terrorism as an important element of their bilateral strategic partnership. The initiative, inter alia, provides for strengthening capabilities to effectively combat terrorism; promotion of exchanges regarding modernization of techniques; sharing of best practices on issues of mutual interest; development of investigative skills; promotion of cooperation between forensic science laboratories; establishment of procedures to provide mutual investigative assistance; enhancing capabilities to act against money laundering, counterfeit currency and financing of terrorism; exchanging best practices on mass transit and rail security; increasing exchanges between Coast Guards and Navy on maritime security; exchanging experience and expertise on port and border security; enhancing liaison and training between specialist Counter Terrorism Units including National Security Guard with their US counter parts.

Within India, NCTC traces its genesis, objectives, structure and powers of the proposed NCTC in the recommendations of a Group of Ministers in 2001 that reviewed the internal security system in the aftermath of the Kargil conflict that made a case for the establishment of a Multi Agency Centre (MAC), a permanent Joint Task Force on Intelligence and an Inter State Intelligence Support System, which were broadly accepted by the NDA Government. It seeks justification from the 2008 report of the Second Administrative Reforms Commission that recommended a Multi Agency Centre should be converted into a National Centre for Counter Terrorism with personnel drawn from different intelligence and security agencies.

NCTC’s mandate is to draw up plans and coordinate action for counter terrorism. Its duties and functions are confined to counter terrorism. The Office Memorandum dated 3 February 2012 provides for a Standing Council consisting of the Director, NCTC, the three Joint Directors, NCTC and the Heads of the Anti-Terrorist Organisation or Force in each State. The Standing Council shall meet as often as necessary and may also meet through video conference. The Standing Council shall ensure that NCTC is the single and effective point of control and coordination of all counter terrorism measures. It is proposed to subsume the Multi Agency Centre in the NCTC.

It appears that there is complicity between Indian National Congress and Bhartiya Janata Party (BJP). The latter appears more concerned about the form rather than the undemocratic and regressive nature of the proposals. Not surprisingly, in his key note address at the FICCI conference on national security and terror, former National Security Advisor, Brajesh Mishra opined that at least the political leadership of Congress and BJP should unite and not allow electoral politics to defeat in National Interest. He advocated Federal Counter Terrorism Agency even if requires constitutional amendments terming States right to the subject of law and order as a mere political excuse but revealed that IB is involved in the business of political intelligence. In such a situation, his recommendation for NCTC like agency which operates under IB is quite inconsistent.   

In the case of US, the 9/11 Committee recommended, "The NCTC should perform joint planning. The plans would assign operational responsibilities to lead agencies, such as State, the CIA, the FBI, Defense and its combatant commands, Homeland Security, and other agencies. The NCTC should not direct the actual execution of these operations, leaving that job to the agencies. The NCTC would then track implementation; it would look across the foreign-domestic divide and across agency boundaries, updating plans to follow through on cases."

Both the US and Indian versions of NCTC empowers an intelligence agency with executive action. This poses gravest threat to democracy and civil rights.

In any case in the US, the NCTC is a legal institution set up through legislation after bipartisan consultations, without legal powers to arrest, detain, interrogate, search, etc. The Indian NCTC has been set up by executive notification under the Unlawful Activities Prevention Act of 1967. This act of subordinate legislation does not have legislative mandate. 

Parliamentarians and senior lawyers have contended that IB is used for harassing political opponents. IB is supposed to undertake clandestine intelligence collection. However, it is strange that while giving powers of search and arrest to the NCTC is unwarranted at the centre such arbitrary powers are uncalled for even for states.

Several Chief Ministers have expressed persistent opposition. They were not consulted before the notification of the NCTC. It violates the federal structure of the country. The potential of misuse of NCTC by the IB is immense and can create Emergency like situation. There was an unprecedented voting in the Parliament on this issue wherein President’s Address mentioned NCTC. In Parliament, 82 votes were against the government’s current proposal and 105 votes in favour. It is clear that there is massive opposition within the Parliament and outside it.

It has been argued in the Parliament that “in USA and the United Kingdom, there are Oversight Parliamentary Committees to look into the activities of the Intelligence Bureau, which is not here in India.”  The opaque manner of MHA merited strong objection because it has chosen not to seek consent of legislatures, states and citizens. The IB has no legal basis for its existence nor legal charter to do any operations work. 

It is noteworthy that a 20 page Private Members’ Bill titled The Intelligence Services (Powers and Regulation) Bill, 2011 has been introduced the Lok Sabha by Manish Tewari “to regulate the manner of the functioning and exercise of powers of Indian Intelligence Agencies within and beyond the territory of India and to provide for the coordination, control and oversight of such agencies.”


There is an immediate need for parliamentary scrutiny of the pre-existing intelligence agencies and mandatory legislative consent for the creation of security, surveillance and database agencies besides the agreement of the States and the citizens.  At present there is no transparency and accountability of the working of intelligence agencies and in the creation of the proposed agencies. At a time when the constitutionality of the National Investigation Agency (NIA) Act, 2008 itself is in question and found unacceptable by the States, the NCTC, NPR an UIDAI proposal was fated to meet stiff and bitter opposition from all.


It is noteworthy that Central Bureau of Investigation (CBI), National Investigation Agency (NIA) and NATGRID are exempted from the applicability of Right to Information Act, 2005, the only transparency law of India. This exemption for CBI and NATGRID which are not governed by any law at all is quite bizarre.


Such exemptions are unacceptable given the fact that central monitoring system (CMS), a centralised mechanism that is meant to assist in lawful interception of communications from landline, mobile and Internet without any lawful interception law in India. India does not have any legal and constitutionally sound phone tapping and e-surveillance law.  The birth of NCTC itself is illegitimate. The fact that it will rely on the databases of agencies which are themselves working without any legislative and democratic mandate is quite unnerving.   

While States and citizens are concerned about their rights and are resisting efforts to turn them into subjects of centralized powers, the emergence of a regressive convergence economy based on databases and unregulated surveillance, biometric and electoral technologies remains largely unnoticed and unchallenged.

You may also want to read…

Why biometric identification of citizens must be resisted? Part I

Biometric identification is modern day enslavement -Part II

Biometric profiling, including DNA, is dehumanising -Part III

Marketing and advertising blitzkrieg of biometric techies and supporters -Part IV

History of technologies reveals it is their owners who are true beneficiaries -Part V

UID's promise of service delivery to poor hides IT, biometrics industry profits -PartVI


(Gopal Krishna is member of Citizens Forum for Civil Liberties (CFCL), which is campaigning against surveillance technologies since 2010)




Ravi S

3 years ago

Who is afraid of Aadhaar & Why?

As the public databases are getting inter-linked one by one thru Aadhaar Number in various States (particularly Delhi, Maharashtra, Andhra), we see the following effects:
1. Middlemen & Officials are finding difficult to continue with corruption in public welfare pensions, scholarships, public health, NREGA, subsidy on PDS Ration, Kerosene, LPG etc.
2. Ineligible, duplicate and fictitious beneficiaries are getting eliminated from public welfare pensions, scholarships, public health, NREGA, subsidy on PDS Ration, Kerosene, LPG etc.
3. Corrupts will find difficult to buy & sell Benami land & building (i.e.under fictitious name).
4. Corrupts will find difficult to open & operate Benami companies for money-laundering.
5. Corrupts will find difficult to open & operate Benami bank accounts for keeping black-money.
6. Tax-evaders will find difficult to evade taxes.
7. Impersonation & proxy will be difficult to commit.
8. Criminals & Terrorists will get detected and tracked thru inter-linked databases of mobile phone, bank account, travel documents etc.
9. Illegal Immigrants will get detected and tracked thru inter-linked databases of mobile phone, bank account, travel documents etc. They will have no place to hide on Indian soil.
10. It will get difficult for Criminals to hide as records are getting accessible to Police from any State of India.
11. It will get difficult to obtain another new Driving License and Arms License from another State once it got impounded.
12. Fraudsters will not be able to steal Provident Fund money.
13. Onion Hoarders will get tracked easily.
14. Dummy candidates will not be able to write competitive exams for others for the sake of money.
15. Ineligible people will not be able to misuse the certificates of income, domicile, education degrees and caste to deprive the eligible people.

Ravi S

3 years ago

Privacy or subversion?
Some privacy champions raise the privacy issue which is irrelevant in a poor country like India where about 750 million people starve for 2-square meal, where illiteracy is high, where religion & caste-based-bias continues, rampant corruption & exploitation exists. They forget that India has a law called Information Technology Act 2000. It has been in existence since year 2000 that protects Aadhaar information along with other laws.

Aadhaar registration collects biometric data and bare minimum information (proof of identity, age, and residence) through enrollment form. Peruse the Enrollment-Form with data fields on page-1 and instructions on page-2. No profiling information is collected, like religion, caste, income, property-holding, education etc.

Privacy issues and risks equally apply to information and data (with or without biometrics) provided by people to census office, tax office, passport office, driving license, vehicle registration, land and building registration, registration of birth, marriage and death, employers (current, past and prospective), banks, credit card companies, insurance companies, telephone service provider, television service provider, internet service provider, internet services (email, video, social media, search engine, chat, voice, file-storage and transfer etc.), registration at school/college, marriage bureaus, post-office and courier services, hospital registration and medical records, visa of US and UK etc.

In India, government departments, public and private sectors have been using biometrics (fingerprints and face photo) for years, decades and centuries in some or all offices. Examples of fingerprints usage are: Land and building registration (since British era), Defense departments (fingerprints as service record of civilian as well as service personnel since British era to modern day, also for access and attendance now), Planning Commission of India (for access and attendance), census office (for compulsory NPR), Passport, RTO (for driving license), insurance companies, IT, BPO and healthcare companies (for access and attendance), visa of US and UK etc. Aadhaar does not violate any privacy or fundamental right.

India has seen anti-modernization protests in the past too. Some people caused bandh & hartals in protest against modernization and computerization of Banking & Rail-ticket 25 years ago. Today people are very happy to enjoy bank ATM and to book rail-ticket from anywhere. Then they had argued that paper records were better than computers. Now those protesters never want to reveal that they ever protested against computerization.
Ironically, there is no opposition to collection of biometric data at other points of services. People stand in long queues to imprint biometrics for obtaining Indian passport, US, UK visa. The attendance & access of most of the IT & ITeS companies are biometric based. The attendance & access of the Planning Commission of India is also biometric based. People have been imprinting all ten-fingers plus details of eyes and other identification marks on body on the first day of joining employment in Defense department of India (civilian as well as service personnel) since British rule of India. Yet one never opposed all that.
The use of electronic devices provides no privacy; such as mobile phone, internet (particularly social network media), email, television, bank card, traffic camera. At any moment the government and the service provider knows of geographical location of people, of conversation on phone, with whom, what we are reading, writing or watching on internet, and what TV channel we are watching, when and for how long. All this is done under electronic surveillance thru device identifiers like IMEI, IP address, GPS etc.

Embassies have switched over to mechanical type-writers in 2013 after CIA worker Snowden’s disclosures. Government also knows our movements thru the traffic cameras on roads, our vehicle number plate, our face etc.
Despite this knowledge, the privacy champions do not want to stop using mobile phones, internet, TV etc. Their sole objective is subversion of Aadhaar, nothing else, and they will not succeed because Aadhaar has already crossed the critical-mass on 15-Aug-2013 by enrolling about 450 million people, assigning 400 million Numbers and linking 30 million bank accounts for Direct Benefit Transfer across many states. And as of November-2013, 500 million Aadhaar have been assigned.

Opponents of Aadhaar believe that snooping / surveillance cannot be done without Aadhaar. Then how Narendra Modi (CM of Gujarat) did the extensive snooping (every minute) of a girl not only on land but also in airplane in year-2009 i.e. before existence of Aadhaar? Intention of the powerful matters a lot!

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