Under the changed Aadhaar law, UIDAI would be given more powers as a regulator.

Highlights Cabinet clears changes to Aadhaar law, bill will go to parliament

Move after top court stopped private companies from demanding ID number

Changes in law will add more safeguards to data, ensure greater privacy

An updated law to make sharing of Aadhaar details voluntary for cellphone connections, bank accounts, school admissions and other services, is expected to be passed in the winter session of parliament. In a first step to changing the law, the cabinet today signed off on the necessary changes, after which the draft bill will be introduced in the Lok Sabha.

The government's move came after the Supreme Court struck down Section 57 of the Aadhaar Act, which allows private entities to demand the 12-digit unique identity number before providing services.

The key change will enable the Aadhaar holder to refuse to share details for opening a bank account or getting a cellphone SIM card. Earlier, it was mandatory to provide Aadhaar details for a host of services and welfare measures.

The law is also likely to be amended further to safeguard personal data and ensure the privacy of the Aadhaar holder. The UIDAI will be turned into an independent authority, with powers to penalise those who demand Aadhaar details without approval.

In September, the Supreme Court said Aadhaar was valid since it empowers the marginalized. But it restricted private entities from demanding access to sensitive information about the Aadhaar holder, including bank account details and biometric data like finger prints and iris scans.

The court, however, ruled that Aadhaar will have to be linked to PAN (Permanent Account Numbers) needed for filing tax returns.

For the exclusion of a "minimal" three per cent, 97 per cent cannot be denied the benefits, the top court said in response to a host of petitions that challenged the validity of Aadhaar. "One can't throw the baby out with the bathwater," said the bench headed by then Chief Justice Dipak Misra.