Overview
Aadhaar is a 12-digit unique identification number issued by the Unique Identification Authority of India (UIDAI) to residents of India. It is a biometric-based ID (using fingerprints and iris scans) combined with demographic information. Aadhaar was established under the Aadhaar (Targeted Delivery of Financial and Other Subsidies) Act, 2016, as a means to streamline identity verification for government services and welfare programs. Today, it serves as the world’s largest biometric ID system, covering the majority of India’s population.
Purpose and Use
The primary purpose of Aadhaar is to provide a universal identity to residents that can be used to access a variety of services. It enables efficient, transparent delivery of subsidies and benefits by preventing duplicate and fake identities. Aadhaar is widely used for e-KYC (Know Your Customer) in banking, telecom, and other sectors to quickly verify an individual’s identity. The government links Aadhaar to various schemes (such as LPG subsidy, public distribution system rations, and MGNREGA payments) to ensure benefits reach the intended beneficiaries. It is also used in the private sector for verification of employees and customers, due to its reliability as a single ID document.
Applicability
Aadhaar is applicable to all residents of India, including Indian citizens and foreign nationals residing in India for a sufficient period. Enrolling for Aadhaar is voluntary in principle; however, in practice it has become quasi-mandatory for many services. For example, possessing an Aadhaar is effectively required to file income tax returns (through mandatory PAN-Aadhaar linking) and to avail most government subsidies. Newborns and minors can also be enrolled (with their UID linked to a parent/guardian until they come of age). There is no age restriction for obtaining Aadhaar, and each person can have only one Aadhaar number that remains valid for life.
Compliance and Legal Framework
From an organizational perspective, compliance with Aadhaar means using it in accordance with the law and respecting privacy. The 2016 Act and subsequent Supreme Court judgments place limits on how Aadhaar can be used: for example, it cannot be made mandatory by private companies for providing services, and individuals have the right to basic services even without Aadhaar. However, certain usages are mandated by law – notably, linking Aadhaar with PAN (Permanent Account Number) for tax purposes and using Aadhaar for verification in government recruitment or benefit disbursement. Organizations that collect Aadhaar data (like employers or banks for KYC) must follow data security practices and may only use it for authorized purposes. The UIDAI oversees Aadhaar usage and can take action against misuse; for instance, the Aadhaar Act imposes penalties for unauthorized access or data leaks. Individuals also have to comply by providing their Aadhaar details when legitimately required (e.g., for EPF account verification or when receiving subsidies) and ensure their information (such as biometric data) is not shared unlawfully.
Significance
Aadhaar’s significance lies in its scale and impact on governance and compliance. For HR and payroll, Aadhaar helps in identity verification of employees, prevention of ghost employees on payroll, and ease of background checks. It simplifies onboarding – many employers ask new hires for Aadhaar as a proof of identity and address. In legal and compliance contexts, Aadhaar has improved compliance with KYC norms and reduced fraud. However, it also raised privacy and data protection discussions; as a result, organizations handling Aadhaar must be careful to comply with the Aadhaar Act and data protection guidelines. Overall, Aadhaar has become a foundational ID that underpins many aspects of employment, taxation, and regulatory compliance in India.
