The Parliamentary Standing Committee on Finance has rejected the National Identification Authority of India (NIAI) Bill, which was meant to give a legal backing to the Aadhaar project and its aim of using biometrics to create a unique identity for every resident of India.

Sources in the Committee say the Bill has been rejected in its current form on the grounds of the project's high cost, as well as concerns regarding national security, privacy and duplication of the National Population Register's (NPR) activities. One major sticking point was reportedly the Aadhaar project's ambition to enrol every “resident” of the country, rather than every “citizen.”

The Committee, headed by Yashwant Sinha (BJP), is likely to table its report in Parliament next week.

Congress MP Rashid Alvi submitted a dissent note at the Committee meeting on Thursday, suggesting that while recommendations could be sent to the government, the Bill should not be rejected outright.

However, the sources indicated that Mr. Alvi himself agreed with most of the Committee's problems with the Bill and that there were serious differences with the government itself regarding the Aadhaar project.

The Home Ministry has raised concerns that Aadhaar's biometric data collection and verification does not meet security criteria. There has also been a turf clash with the Home Ministry's National Population Register which is also documenting photographs, fingerprints and iris scans of all residents.

In a written reply to a question in the Rajya Sabha on Wednesday, Minister of State for Home Affairs Jitendra Singh said the NPR database would be sent to the Unique Identification Authority of India (UIDAI) for de-duplication. The UIDAI was only generating unique identity numbers and communicating it in a letter, but it was the NPR that intends to issue Resident Identity Cards, he emphasised.

So far, the UIDAI, headed by the former Infosys chief, Nandan Nilekani, has issued about 6 crore Aadhaar numbers, and over 10 crore people have been enrolled into the system. The project's budget is Rs. 1,660 crore, of which over a third has already been spent.

However, there is still no legal parliamentary backing for the project, a glitch that was sought to be retrospectively corrected by the NIAI Bill.

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