Highlighting the efficacy of Aadhaar in transferring subsidies to targeted beneficiaries, Finance Minister Arun Jaitley on Wednesday expressed hope that the related legislation would stand the test of Constitutionality.

“The legislation has been passed and I am sure it will pass the test of Constitutionality for the reason that even while upholding and rightly so the idea of privacy as an important Constitutional guarantee, the restraints under Article 21 which the Supreme Court said could be imposed, have to be by law, reasonable,” the Minister said.

Some of the illustrative restraints they mentioned are in the larger interest of national security, detection of crime, distribution of social benefits, Jaitley, said at a Conclave on Financial Inclusion which was organised by the United Nations in India.

“The third criterion is consciously included. That is why Aadhaar was introduced and that is why the interplay of one billion Aadhaar, bank accounts and phones is very important,” the Minister said.

When Aadhaar was introduced by the UPA government, Jaitley said it was still an evolving idea and operated under executive guidelines.

“What this law would be eventually used for was not clear,” he said, adding that the legislation was also required “because of the evolving debate and the confidentiality of that data and to build some iron walls was also equally important”. The Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Bill, 2016 was passed by Parliament last year.

The Supreme Court had recently ruled that privacy is a fundamental right for citizens though the question of Aadhaar is still under hearing by a smaller bench.

Meanwhile, the Finance Minister also said that the government brought the issue of financial inclusion to the fore front and helped 30 crore families to open bank accounts through the Jan Dhan scheme.

“About 42 per cent of households were unbanked before the Jan Dhan Yojana,” he said, adding that the number of zero-balance accounts has reduced from 77 per cent to 20 per cent. “Even these would become operation as the Direct Benefit Transfer scheme expands,” he said.

Espousing the benefits of demonetisation, he said that it has helped increase the tax base and has led to greater formalisation of the economy, while reducing the quantum of cash in the economy.

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