The government through an amendment to the Aadhaar Act has allowed the use of India's national biometric ID by states for devolution of funds through their schemes.
The Lok Sabha, last week, and the Rajya Sabha this week approved amendments to the Aadhaar law to allow voluntary use of the 12-digit unique number as ID proof for obtaining mobile phone SIM cards and opening bank accounts.
Alongside this, the government also inserted a new clause allowing the use of Aadhaar data by states for implementation of their schemes.
According to the Aadhaar and Other Laws (Amendment) Bill, 2019 - posted by the Lok Sabha after its passage in the House - a new section 5A has also been inserted.
"In section 7 of the principal Act, after the words 'the Consolidated Fund of India', the words 'or the Consolidated Fund of State' shall be inserted," it said.
Section 7 of the Aadhaar Act pertains to targeted delivery of financial and other subsidies, benefits and services funded from the Consolidated Fund of India.
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With the insertion of the Consolidated Fund of State, states can also use the Aadhaar database for better targeting of schemes.
Speaking on the amendment in Rajya Sabha on Monday, Law and IT Minister Ravi Shankar Prasad had stated many state governments used to complain and so an insertion has been made.
"Therefore, what we have done is, under clause 7, we are giving the benefit to schemes that are paid out of the Consolidated Fund of India. But if we, in the States also, give many subsidies, kindly also bring the Consolidated Fund of State. So, that amendment also has been approved by the Lok Sabha," he had said.
He said the use of Aadhaar, which helps eliminate duplicate and ghost beneficiaries because of biometric identification, has helped save Rs 1.41 lakh crore for the government.