What is the UIDAI? How has this government body harnessed IT to improve targeted delivery of government…

Question

What is the UIDAI? How has this government body harnessed IT to improve targeted delivery of government benefits (DBT)? How can the Aadhaar Card help in financial transactions?

Ghissu Editorial · Accepted Answer

UIDAI is the statutory authority under the Aadhaar Act 2016 that issues a unique 12-digit biometric identity, now over 140 crore numbers, which underpins Direct Benefit Transfer into Aadhaar-linked accounts and removes duplicate beneficiaries. Aadhaar aids financial transactions through AePS biometric banking, Jan Dhan account linkage and UPI payments.

**Introduction**

UIDAI, established in 2009 and statutory under the Aadhaar⟦2⟧⟦1⟧ Act 2016, provides a unique digital identity to Indian residents, transforming governance and welfare delivery through Aadhaar. It supports transparency and inclusion by enabling efficient service delivery to over 140 crore residents.

**UIDAI and Digital Identity**

1. **Biometric Infrastructure**: UIDAI collects minimal demographic and biometric data, issuing over 140 crore Aadhaar numbers, enabling “one resident, one Aadhaar” to reduce duplicate identities and fake beneficiaries.

**Targeted Delivery via DBT**

1. **Direct Benefit Transfer⟦3⟧**: Aadhaar integration with DBT channels subsidies directly into Aadhaar-linked bank accounts, saving ₹3.48 lakh crore⟦4⟧ nationally by April 2025 and reducing ghost beneficiaries, as per BlueKraft Digital Foundation’s assessment.  
2. **Andhra Pradesh⟦7⟧⟦6⟧⟦5⟧ Audit**: ==The 2024 CAG audit revealed ₹968 crore excess payments in Andhra Pradesh’s CFMS, highlighting IT governance gaps and the need for stronger backend controls.==

**Aadhaar in Financial Transactions**

1. **Authentication and Inclusion**: Aadhaar-enabled payment systems (AePS) allow biometric banking without cards; linkage with 57 crore Jan Dhan⟦8⟧ accounts promotes financial inclusion by facilitating access to credit and subsidies.  
2. **Digital Payments and Security**: Aadhaar supports UPI’s secure real-time payments but raises data breach concerns, addressed by frameworks like the Data Empowerment and Protection Architecture (DEPA) to ensure user consent and cybersecurity.

**Way Forward**

1. **Data Privacy and Literacy**: Strengthen data protection laws and expand digital literacy programs, especially in rural areas, to bridge access gaps and protect sensitive data.

**Conclusion**

UIDAI’s Aadhaar system is pivotal for targeted welfare and financial inclusion, requiring enhanced privacy and governance to sustain its impact and build citizen trust.

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