The central Act makes Aadhaar mandatory for any “subsidy, benefit or service” for which the expenditure is borne fully or shared partially by the Consolidated Fund of India. The central Act makes Aadhaar mandatory for any “subsidy, benefit or service” for which the expenditure is borne fully or shared partially by the Consolidated Fund of India.

Even as a five-judge Constitution bench of the Supreme Court is set to hear challenges to the Aadhaar Act, the central government has floated the idea of state governments enacting their own “State Aadhaar Act”, on the lines of the central Act passed by Parliament last year.

The Centre made this suggestion at the national conference of state chief secretaries, organised by NITI Aayog last week. “Enactment of State Aadhaar Act” was one of the “interventions requested” by the Cabinet secretariat. Giving a presentation on the topic of “effective implementation of DBT (direct benefit transfer) in states”, A R Sihag, Secretary (Coordination and Public Grievances) in the Cabinet Secretariat, emphasised the issue twice. Sihag could not be reached for comment.

The central Act makes Aadhaar mandatory for any “subsidy, benefit or service” for which the expenditure is borne fully or shared partially by the Consolidated Fund of India. This means that every welfare subsidy or benefit, from fully-funded or centrally-sponsored schemes (where states share part of the fiscal burden), is conditional on verification through Aadhaar.

However, several state governments have their own subsidies or benefit schemes, where the burden is defrayed out of their Consolidated Fund. For instance, the Nitish Kumar government’s bicycle scheme for schoolgirls in Bihar and the previous Akhilesh Yadav government’s laptop scheme for students in Uttar Pradesh were funded by the state exchequer.

Consequently, the central Aadhaar Act cannot provide legal basis for making Aadhaar mandatory for such schemes. However, a State Aadhaar Act, as suggested by the Cabinet Secretariat, could provide legal basis for making it mandatory for state-funded welfare schemes too.

But the Centre’s suggestion could prove tricky as the enactment of a state legislation is the prerogative of the state legislatures. Also, it impinges on the state government’s autonomy to set up a mechanism for expenditure from the state exchequer.

In fact, the Mamata Banerjee-led government in West Bengal had got the state assembly to pass a resolution in 2014 against the central government’s decision to link Aadhaar cards with DBT schemes.

Last year, the Opposition had targeted the government for pushing the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act through the Rajya Sabha by designating it as a money bill — the Rajya Sabha cannot withhold a money bill.

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