The Standing Committee on Finance has rejected the UID Bill, which was aimed to enforce bio-metrics enabled Aadhaar identification system on all residents of India

In a major set-back to the Manmohan Singh led government, the Planning Commission and Nandan Nilekani, the former chief of Infosys, the Parliamentary Standing Committee on Finance, headed by Yashwant Sinha has rejected the National Identification Authority of India Bill (NIA Bill).

So far, the UIDAI has issued over 5.75 million UID numbers across the country. The cumulative revised budget estimates of the Aadhaar project, which was launched in 2009, is Rs1,660 crore for FY11 and FY12. The UIDAI has already spent more than Rs556 crore on the scheme.

Considering all the overlaps, objections, and the serious differences within the government on the NIA Bill, the Standing Committee is going to call for a completely fresh legislation.

The finance ministry, the home ministry and the Planning Commission, further strengthening the committee's reservations to the big-ticket scheme, have also opposed the project.

The Parliament witnessed some tense moment while the report was being submitted. There was a spat between Congress' member of Paliament (MP) Rashid Alvi and Bhartiya Janata Party's (BJP) SS Ahluwalia. Mr Alvi accused the BJP MP of leaking a paper regarding the Bill to some reporters. Both the leaders also disagreed over the term 'residents' and 'citizens' as an eligibility for the UID or Aadhaar number.

Earlier last month, Home Minister P Chidambaram opinioned that the biometric census done by the Aadhaar project does not pass security criteria. The Home Ministry even claimed that UID number can be generated without any verification of documents, mandatory for it.

In addition, the Registrar General and Census Commissioner also categorically said that the job of collecting biometrics data should be left to them.

While the government does not have to go by the committee's recommendations, given the tense political situation, the United Progressive Alliance (UPA) government may not want to take any more chances, especially after the 10-days deadlock in the Parliament over foreign direct investment (FDI) in retail.

Earlier Bengaluru-based Col (Retd.) Mathew Thomas of Citizens' Action Forum and VK Somasekhar, founder-trustee of Grahak Shakti had filed a potential class action suit against the Unique Identification Authority of India (UIDAI).

According to the petition, there was urgency in filing the suit as the defendants (UIDAI, Union Govt, and Deputy Chairman, Planning Commission) intended to complete major part of the Aadhaar enrolment before the matter was decided by the Standing Committee on Finance and presented before the Lok Sabha so as to compel the Parliament to support the project with retrospective effect as money has already been spent.
 
"Every day the UID project continues, several crore of rupees of taxpayers' money would be lost. Apart from this, the continued gathering of people's data would be an unacceptable security risk both to the people and the nation its self. It is respectfully submitted that while millions are dying of hunger, starvation and deprivation be it children, women, men or aged persons, spending such huge amounts of money to benefit and make it possible for many to pocket the money at the expense of the citizen in the name of Aadhaar even without any legislative sanction is illegal. Plaintiffs are affected by the conduct of the defendants and so are many millions of Indians," said Col (Retd.) Thomas and Mr Somasekhar in the petition.