Question 97 from UPSC CSE 2020 - POLITY & GOVERNANC E

Question

Consider the following statements:
1. Aadhaar metadata cannot be stored for more than three months.
2. The State cannot enter into any contract with private corporations for sharing of Aadhaar data.
3. Aadhaar is mandatory for obtaining insurance products.
4. Aadhaar is mandatory for getting benefits funded out of the Consolidated Fund of India.
Which of the statements given above is/are correct?

IASCODEX · Accepted Answer

Correct Option: B. 2 and 4 only

Strategy: - Evaluate Statement 1: Recall that data retention is limited to six months by Supreme Court guidelines and Aadhaar regulations.
- Evaluate Statement 2: Confirm that Aadhaar data sharing with private entities was prohibited by the Supreme Court's judgment striking down Section 57 of the Aadhaar Act.
- Evaluate Statement 3: Remember that regulatory circulars state insurers cannot mandatorily insist on Aadhaar.
- Evaluate Statement 4: Verify that Section 7 of the Act upholds Aadhaar as mandatory for benefits from the Consolidated Fund of India.
- Eliminate options that include incorrect statements, specifically Statement 1 (incorrect retention period) and Statement 3 (incorrect mandatory requirement for insurance).

Key Info: Aadhaar is governed primarily by the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016, and related regulations.

- **Aadhaar Metadata**: Authentication records (metadata) must not be retained by UIDAI or any entity for more than six months, as per Regulation 27(1) of the Aadhaar (Authentication) Regulations and the Supreme Court's 2018 verdict. Retention beyond this period is impermissible, ensuring individual privacy safeguards.
- **Data Sharing with Private Corporations**: The Supreme Court (2018) struck down Section 57 of the Aadhaar Act, which previously allowed private corporations to access Aadhaar authentication. Consequently, the State cannot contract private entities for Aadhaar data sharing; only government agencies may mandate Aadhaar-based authentication under strict legal provisions.
- **Aadhaar and Insurance Products**: IRDAI has clarified that Aadhaar is not mandatory for buying insurance products. Insurers cannot deny service due to lack of Aadhaar and may only accept it voluntarily for KYC compliance, per the customer's choice.
- **Consolidated Fund of India and Benefits**: Section 7 of the Aadhaar Act mandates Aadhaar proof or authentication for receiving government subsidies, benefits, or services funded by the Consolidated Fund of India. Alternative identification methods must be offered to those without Aadhaar until it is obtained, ensuring inclusion.
- **Supreme Court (KS Puttaswamy v. Union of India, 2018)**: Upheld Aadhaar's validity for welfare schemes, but prohibited private mandatory usage and emphasized privacy safeguards with strong restrictions on data retention and use.
- **UIDAI**: The statutory authority overseeing Aadhaar implementation and regulations. Aadhaar is voluntary, except when legally mandated for government benefits.
- **Enforcement and Legal Framework**: Key authorities include UIDAI, IRDAI (for insurance sector regulation), and relevant Ministries delivering welfare schemes.

IASCODEX · Answer

Option A: 1 and 4 only

IASCODEX · Answer

Option C: 3 only

IASCODEX · Answer

Option D: 1, 2, and 3 only