The UIDAI has taken two successive governments in India and the entire world for a ride. It identifies nothing. It is not unique. The entire UID data has never been verified and audited. The UID cannot be used for governance, financial databases or anything. It’s use is the biggest threat to national security since independence. – Anupam Saraph 2018

When I opposed Aadhaar in 2010 , I was called a BJP stooge. In 2016 I am still opposing Aadhaar for the same reasons and I am told I am a Congress die hard. No one wants to see why I oppose Aadhaar as it is too difficult. Plus Aadhaar is FREE so why not get one ? Ram Krishnaswamy

First they ignore you, then they laugh at you, then they fight you, then you win.-Mahatma Gandhi

In matters of conscience, the law of the majority has no place.Mahatma Gandhi

“The invasion of privacy is of no consequence because privacy is not a fundamental right and has no meaning under Article 21. The right to privacy is not a guaranteed under the constitution, because privacy is not a fundamental right.” Article 21 of the Indian constitution refers to the right to life and liberty -Attorney General Mukul Rohatgi

“There is merit in the complaints. You are unwittingly allowing snooping, harassment and commercial exploitation. The information about an individual obtained by the UIDAI while issuing an Aadhaar card shall not be used for any other purpose, save as above, except as may be directed by a court for the purpose of criminal investigation.”-A three judge bench headed by Justice J Chelameswar said in an interim order.

Legal scholarUsha Ramanathandescribes UID as an inverse of sunshine laws like the Right to Information. While the RTI makes the state transparent to the citizen, the UID does the inverse: it makes the citizen transparent to the state, she says.

Good idea gone bad
I have written earlier that UID/Aadhaar was a poorly designed, unreliable and expensive solution to the really good idea of providing national identification for over a billion Indians. My petition contends that UID in its current form violates the right to privacy of a citizen, guaranteed under Article 21 of the Constitution. This is because sensitive biometric and demographic information of citizens are with enrolment agencies, registrars and sub-registrars who have no legal liability for any misuse of this data. This petition has opened up the larger discussion on privacy rights for Indians. The current Article 21 interpretation by the Supreme Court was done decades ago, before the advent of internet and today’s technology and all the new privacy challenges that have arisen as a consequence.Rajeev Chandrasekhar, MP Rajya Sabha

“What is Aadhaar? There is enormous confusion. That Aadhaar will identify people who are entitled for subsidy. No. Aadhaar doesn’t determine who is eligible and who isn’t,” Jairam Ramesh

But Aadhaar has been mythologised during the previous government by its creators into some technology super force that will transform governance in a miraculous manner. I even read an article recently that compared Aadhaar to some revolution and quoted a 1930s historian, Will Durant.Rajeev Chandrasekhar, Rajya Sabha MP

“I know you will say that it is not mandatory. But, it is compulsorily mandatorily voluntary,” Jairam Ramesh, Rajya Saba April 2017.

August 24, 2017: The nine-judge Constitution Bench rules that right to privacy is “intrinsic to life and liberty”and is inherently protected under the various fundamental freedoms enshrined under Part III of the Indian Constitution

"Never doubt that a small group of thoughtful, committed citizens can change the World; indeed it's the only thing that ever has"

“Arguing that you don’t care about the right to privacy because you have nothing to hide is no different than saying you don’t care about free speech because you have nothing to say.” -Edward Snowden

In the Supreme Court, Meenakshi Arora, one of the senior counsel in the case, compared it to living under a general, perpetual, nation-wide criminal warrant.

Had never thought of it that way, but living in the Aadhaar universe is like living in a prison. All of us are treated like criminals with barely any rights or recourse and gatekeepers have absolute power on you and your life.

Announcing the launch of the#BreakAadhaarChainscampaign, culminating with events in multiple cities on 12th Jan. This is the last opportunity to make your voice heard before the Supreme Court hearings start on 17th Jan 2018. In collaboration with @no2uidand@rozi_roti.

UIDAI's security seems to be founded on four time tested pillars of security idiocy

1) Denial

2) Issue fiats and point finger

3) Shoot messenger

4) Bury head in sand.

God Save India

Monday, May 15, 2017

11400 - Why Duplicate PAN Cards Are Not as Big an Issue as the Modi Government Claims - The Wire

Why Duplicate PAN Cards Are Not as Big an Issue as the Modi Government Claims

With all the detected duplicate PAN cards being deactivated and there being only 645 fake PAN cards, why is the government pushing for drastic changes to India’s income tax structure?

The issue of duplicate PAN cards is not as widespread as the government believes. Credit: PTI

In March this year, one of the main reasons the government gave for introducing the new section 139AA into the Income Tax Act, 1961, is that fake Permanent Account Number (PAN) cards were rife in circulation. The government’s idea is that the linking of Aadhaar cards to PAN cards will eventually weed out fake PAN cards. By this logic, the government has made it mandatory to link the two through section 139AA. The section says that without this linking, the PAN card will become invalid and a citizen will not be able to file their taxes anymore. This has now been challenged in the Supreme Court and the bench of Justice Arjan Kumar Sikri and Justice Ashok Bhushan heard the matter for six days; judgment is now reserved.

During the debate in parliament about introducing amendments to the Finance Bill, 2017, finance minister Arun Jaitely defended section 139AA saying, “In a situation where it has come to light that one citizen has up to five PAN cards, to avoid that, we have linked the PAN to Aadhaar.” This argument was repeated by attorney general Mukul Rohatgi before the Supreme Court, where he said that people and shell companies possessing multiple PAN cards were causing tax losses of thousands of crores of rupees. Nanden Nilekani also echoed similar arguments: “There are 250 Million PANs, but only about 40 million who file returns.”

How sound are these claims about the deluge of fake PAN cards? There are some possible answers in various documents and reports from the Ministry of Finance as well as many questions raised in parliament, over the last 17 years.

History of PAN
Assesses of the income tax department used to be identified by their General Index Register (GIR) number. This was essentially a manual system. The GIR number was unique only within an assessing officers ward or circle and not throughout the country. To overcome these shortcomings, the PAN (old series) was first introduced in 1972. Commissioners made the allotment of PAN to assessees under various assessing officers in their charge from within the block allotted to them. 

The main short comings of this old PAN were that no database was maintained and there was no check to avoid allotment of multiple PANs to a taxpayer. The allotment of PAN was not centralised, PAN was not permanent as jurisdiction of the assessee was part of the PAN and, therefore, was prone to changes with the change in jurisdiction for example.

A new series of PAN was devised which took care of these limitations. Allotment of current series of PAN was started in 1995 after studying the system of identification numbers practised in the UK (National Insurance Number), USA (Social Security Number), Spain (Fiscal Identification Number) and Australia (Tax File Number). Section 139A of the Act was amended in 1995 to enable allotment of PAN under this new series. By 1998, this was mandatory in the whole of India.

Structure of the new PAN
The new series of PAN is based on a few constant permanent parameters of a taxpayer, to ensure its uniqueness. These details include five core fields of information: the full name of the taxpayer, date of birth/incorporation, status, gender, father’s name. The PAN under the new series is allotted centrally by a customised application system for all-India uniqueness. The system automatically generates a 10 character PAN using the information in the above five core fields. This is a new concept to prevent allotment of more than one PAN to assesses with the same or similar names. At the time of PAN allotment, the phonetic PAN of the assessee is compared with the phonetic PANs of all the assesses to whom PAN has been allotted all over the nation. If a matching phonetic PAN is detected, a warning is given to the user and a duplicate phonetic PAN report is generated. In such cases, a new PAN can only be allotted if the assessing officer chooses to override the duplicate phonetic PAN detection.

Gap between PAN holder and tax payers
In a reply to the Lok Sabha on February 3, 2017, the government said, “Overall, more than 25 crore PANs have been allotted so far.” Meanwhile, in another reply to the Rajya Sabha the last year, on August 9, 2016, the government informed the house that “the total number of taxpayers of income tax in the country for the Financial Year 2015-16 is 5,24,38,971.”

This means that the PAN card to tax payer ratio is around 4.77, which broadly matches with the finance minister’s sentiment in parliament, when he said that some people have five PAN cards. By a simple division, it would seem that there are nearly five PAN cards per registered tax payer.

But objective statistics can tell multiple stories. The American humourist Evan Esar said that statistics is “the science of producing unreliable facts from reliable figures.” So instead of rushing to conjecture, we have to examine why there is this huge gap between the number of PAN cards and the number of income tax payers.

First of all, PAN cards do not have any expiry dates, unlike passports and driving licenses. So this figure of 25 crore PAN cards which have been issued between 1995 till date, includes the cards of those who died in this same period.

A look at the Census data reveals that more than 19 crore people died between 1995 and 2016. A few crores of them would have been PAN holders. As long as their PAN numbers remain within the PAN database, we will not know how many of the 25 crore PAN cards belong to the deceased. Therefore to say there are five PAN cards per income tax payee, would be an incorrect.

Secondly, all PAN card holders are not tax payers. It is compulsory to quote PAN in all documents pertaining to various financial transactions prescribed under Rule 114B of the Income-tax Rules, 1962. This is amended from time to time to bring more transactions under monitoring and to widen the income tax net. PAN is also mandatory for everyone who falls in the criteria fixed in Section 139 A of the Income Tax Act, 1961. 

This issue was discussed in the third report of the Tax Administration Reform Committee Report (TRAC) in November 2014, which was submitted to the finance ministry. The report says, “to a significant extent, the difference reflects the use of PAN card as a proof of identity for various stipulated economic functions that have no relation to tax.”

The finance ministry in its accepted and implemented recommendations of the TRAC Report, was on the same side of the debate as the TRAC report, and made it clear that “PAN is being used voluntarily as an identification document by individuals, and the gap does not necessarily reflect number of non-filers.” The Central Bureau of Direct Taxes (CBDT) has also not raised many concerns about the gap between the number of PAN cards issued and the number of tax payers.

So far what this shows is that India is seeing a situation of defunct, unused or duplicate PAN cards, but this does not necessarily indicate the scale of fake PAN cards. A duplicate PAN card is a multiple PAN card issued by the Income Tax Department itself, whereas a fake PAN card is a forged one. So the figures on duplicate and fake PAN cards can clear up this ambiguity.

Duplicate PAN cards
Duplicate PAN Cards are mainly generated because people who lost their PAN cards simply apply for fresh ones. Card holders are supposed to file an FIR for the loss of their card and apply for a reprint of the same with a copy of the FIR and the old PAN card’s number. In order to avoid this legal route, many people simply apply for a new card. Possessing a duplicate PAN card is in fact against the law and invokes a penalty of Rs 10,000.

Duplicate PAN Cards are detected during a de-duplication process. During the issue of the PAN card, through the Initial PAN Allotment System (IPAN) or Assessee Information System (AIS), the software uses phonetics-based algorithm to weed out duplicates. Duplicates are then deactivated after seeking explanation from the persons and also after a physical verification through concerned offices. This process of weeding out duplicates, was explained in parliament, in 2006.

An answer to a related question in 2007 told us that there are very few cases of misuse of duplicate PAN cards. The finance ministry also said that around 13 lakh people were found to have duplicate PANs and after de-duplication, this number was trimmed to 8.5 lakh people.

That same year, Sushma Swaraj raised a question on this and then finance minister P. Chidambaram answered it. Chidambaram said that the de-duplication of 11.43 lakh PAN holders had already been done.

The next year, the government informed parliament that there were no cases of demat accounts being opened with duplicate PAN. In 2010, the government said that between April 1, 2009, and February 25, 2010, 4,720 duplicate PAN cards were identified and deactivated. And then recently in 2016, when the issue of duplicate PAN was raised again, the government said that 11,56,894 duplicate PANs deleted.

This figure is an interesting one – in 2007, the government said that 11.43 lakh duplicate PAN cards were deleted. And after nine years, in 2016, the governement said that 11.57 lakh duplicate PAN cards were deleted. This means that in nine years, only 0.14 lakh duplicate PAN cards were detected and deleted. This means there has not been a large increase in duplicate PAN cards at all. Of course this may be due to the fact that cases of duplicate PAN cards decreased as software capabilities increased or the awareness of the illegality of this increased.

Now compare this 11.57 lakh duplicate PAN cards with the total figure of 25 crore PAN cards issued. We can see that this is just 0.46% of the total PAN Cards issued and these were also deactivated by the income tax authorities.

Fake PAN cards
The case of fake PAN cards is also significant. In 2005, this issue of forged cards was raised in Rajya Sabha, in an interesting case of a paan seller acting as a conduit for fake PAN cards.

As recently as four years ago, in 2013, the government told Lok Sabha that the total number of fake PAN cards detected by authorities between 2009 and 2013 was only 509. In the years before this, the government said 136 fake PAN cards had been found, bringing the total number of fake PAN cards to 645. The government said that fake PAN cards were detected through the Know Your Customer (KYC) verification followed by field verification.

Nowadays, PAN cards are printed on the same material used for credit cards and with a hologram to curb any chances of tampering. Recently a newly improved design of PAN card has been introduced with machine readable QR-Code too.
What all this data realised by the government shows is that from official records, out of 25 crore PAN cards, only 0.46% or 11.57 lakh are actually duplicate. These have already been cleared from the system. Furthermore, the total number of fake PAN cards the government has found, is 645. Then there are other discounts to be made to the figures, once the date of deceased persons are subtracted. The date also needs to be subtracted for PAN holders who do not need to pay taxes and who might only use their cards as a proof of identity only.
So while the government continues to raise the issue of making Aadhaar cards compulsory to bring more tax compliance, and to crack down on duplicate and fake PAN cards, the data would suggest a disproportionality between the problem and its suggested solutions.

James Wilson is a member of the Mullaperiyar Special Cell.