Context: With the government refusing to extend the deadline for Aadhaar details of workers under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) to  be seeded to their job cards beyond December 31, 2023, to enable payments through an Aadhaar-based payment system (ABPS), the system has now become mandatory.

Aadhaar seeding

• It is the process of linking the 12-digit Aadhaar number of individuals with their personal identification documents, such as bank account numbers, pension IDs, scholarships, and other government-issued identification.
•  It is a mechanism to integrate Aadhaar numbers into the service delivery databases of various service providers, enabling the use of Aadhaar for authentication and facilitating the transfer of Direct Benefit Transfers (DBT) provided by various government schemes.
• Aadhaar seeding is also essential for receiving subsidies and benefits, and it is a part of the account opening process for customers with Aadhaar numbers, enabling them to operate their accounts through Aadhaar Enabled Payment Systems (AEPS) and to receive various subsidies.
• The process involves linking the Aadhaar number to the customer's account and in the NPCI mapper, and it is facilitated through various channels, including bank branches, ATMs, internet banking, and SMS banking.
• Aadhaar seeding is also a prerequisite for the authentication of accounts, and it is a means to ensure the interoperability of Aadhaar numbers across different service providers.

Benefits of Aadhaar Seeding:

•  Proper Identification: Aadhaar seeding leads to better targeting of development schemes provided by the government, public sector, and private sector, ensuring that all fake, duplicate, and ghost records are weeded out from databases so that leakages resulting from such records can be prevented
• Ease of Identification: Linking Aadhaar with various government schemes makes it easier to identify fake accounts, pensions, etc., and ensures that the benefits reach the right and deserving people
• Simpler and Faster Flow of Information and Funds: Aadhaar seeding is a part of the Direct Benefit Transfer (DBT) scheme, which aims to provide subsidies and benefits directly to the beneficiaries' bank accounts, eliminating intermediaries and ensuring that the benefits reach the intended recipients
• Interoperability: Aadhaar seeding ensures the interoperability of Aadhaar numbers across different service providers, enabling the use of Aadhaar for authentication and facilitating the transfer of DBT provided by various government schemes
• Convenience: Aadhaar seeding is a prerequisite for the authentication of accounts, and it is a means to ensure the convenience of operating accounts through Aadhaar Enabled Payment Systems (AEPS) and to receive various subsidies

Concerns of Aadhaar Seeding:

• Security Concerns: Security remains a significant concern with Aadhaar seeding, as the concentration of sensitive information with specific entities increases the risk of data breaches and identity theft
• Privacy Concerns: The use of Aadhaar for authentication and the collection of biometric data raises concerns about privacy and the potential misuse of personal information
• Reliability of Biometric Authentication: The reliability of biometric authentication is another concern, as it may not work correctly for everyone, leading to exclusion and denial of benefits
•  Risk of Disastrous Results: The fact that Aadhaar is linked to so many things makes it difficult not to have disastrous results, and the potential for errors and misuse of data is a significant concern
• Exclusion of Vulnerable Populations: The mandatory linking of Aadhaar with various services and schemes may exclude vulnerable populations who do not have Aadhaar numbers or face difficulties in obtaining them