On Thursday, the Information Technology Ministry proposed rules to allow private entities to carry out Aadhaar authentication for delivering benefits, services and subsidies offered by the government sector.

Only government ministries and ministries are currently allowed to carry out Aadhaar authentication “for good governance, preventing the drain of public funds, promoting innovation and disseminating knowledge,” a government press release said.

The Unique Identification Authority of India (UIDAI), responsible for Aadhaar, must ensure that entities requesting Aadhaar authentication meet the privacy and security standards stipulated in the regulations.

According to official figures, UIDAI records between 7 and 8 crores of Aadhaar authentications every day. More than 1,000 direct benefit schemes, 720 by state governments and 318 centres use Aadhaar authentication services to avoid duplication and eliminate ghost beneficiaries. As of November 2022, multiple central schemes have disbursed over Rs 7,66,055.9 crore to beneficiaries through 1,010 crore successful transactions using Aadhaar information.

The Public Distribution System (PDS) accounted for 20% of the total number of authentications; the telecom sector accounted for 6%, and the Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS) accounted for 2% of the authentications. According to amendments proposed by the Ministry of Electronics and Information Technology (MeitY), private entities can set up platforms to facilitate all these initiatives after obtaining government licenses.

The Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016, provides that entities may seek to implement Aadhaar for stated purposes. A law called Good Governance (Social Welfare, Innovation, Knowledge) Rules, 2020 sets out the purpose of Aadhaar authentication.

“The proposal will promote the living convenience of residents and enable them to better access services as one of the stated purposes,” MeitY said in a release. The ministry has invited public feedback on its proposal, with a deadline of May 5, 2023. Feedback can be sent on the MyGov website.

Private entities that want to use Aadhaar authentication must prepare a proposal to the central government stating their purpose. The government can then send their proposals to UIDAI, which will notify the central government to allow the applicant entity to undergo Aadhaar authentication.