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Aadhaar was conceived as an idea after Kargil war by Kargil Review Committee as an identity card to villagers abiding in the border areas and terrorism inflicted zones. But it has now evolved into an all inclusive Indian Identity Card that bears sensitive bio-metric information’s of its citizens.
Aadhaar and Security
Aadhaar has now been increasingly used for social security schemes like linking Direct Benefit Transfer (DBT), opening bank accounts, buying mobile SIM cards etc. This has greater security implications like 

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Possibility of Mass surveillance: This may put individual liberty in peril questioning the fundamental rights guaranteed by the constitution. In a democracy like India where vote bank politics plays a major role in determining election results, Aadhaar may be misused for political purposes.
Financial security: As all financial data like PAN Card information, Tax returns, Bank Details are stored in a single UID database any breach would have a potential to cause a financial breakdown.
Cyber security: India still in want of robust Cyber security infrastructure. There are legal lacunae dealing with data’s taken out of the country. National Critical Information Infrastructure Protection Centre (NCIIPC)  that deals with cyber attacks envisaged in National Cyber Policy, 2013 is yet to be implemented.
Safety features: With only Bar Code and QR code the physical Aadhaar card do not have any secured featres like Digital signature or Halogram. This makes it easy and vulnerable for duplicating.

Need for new security updates
With so many security implications at its hand Aadhaar’s claimed security was questioned and put into scanner following certain incidents.

Alleged breach by Tribune Report: A sting operation conducted by ‘The Tribune’ claimed to have access to Aadhaar details by bribing an agent.
Hacking: The alleged hacking of website of the Government of Rajasthan, “aadhaar.rajasthan.gov.in”, through which one could access and print Aadhaar cards of any Indian citizen.
Suspension of License for Airtel Payment Bank: Recently UIDAI suspended the eKYC (electronic know your customer) licence of Airtel Payments Banks. It was alleged that customers consent was not taken for account opening. PTI report also notes that Airtel routed the LPG subsidies to their Airtel payment bank accounts instead of the beneficiaries’ original bank accounts.

Aadhaar updates.
Taking into cognizance the potential threat, the UIDAI has responded with increasing the security features of Aadhaar such as introducing,

Two tier shield for Aadhaar Data: To eliminate the need to share and store Aadhaar numbers, the UIDAI has introduced virtual ID.

A virtual ID can be used by the Aadhaar card holders in place of the actual biometric ID. It is a temporary 16-digit random number mapped with the aadhaar number.

Introduction of UID Token: It is a 72 character alphanumeric provided by UIDAI. This allows an agency to ensure uniqueness of its beneficiaries, customers etc… without having to store Aadhaar number to their databases.

Introduction of Face recognition: This feature can be used in fusion with existing fingerprint, Iris scanner and OTP.

Aadhaar and Right to Privacy
Supreme Court in Justice puttaswamy vs Union of India case, ruled that right to privacy is intrinsic part of life and liberty under Article 21.
The judgment also concludes that privacy is a necessary condition for the meaningful excuse of other guaranteed freedoms. It also clarified that privacy is a fundamental, inalienable right intrinsic to human dignity and liberty.
After Supreme Court’s verdict Aadhaar has assumed greater significance as it directly affects the fundamental right. Its implications are now far beyond just data security. They are,
1. International Significance: Privacy enjoys a robust legal framework internationally and India has also signed and ratified  International Covenant on Civil and Political Rights (ICCPR).
2. Drafting Data (privacy & Protection) bill, 2017: Introducing a rights based approach where consent of individuals is mandatory for collecting, processing storing and deletion of personal data with very limited exception on case by case.  The bill will be drafted taking key inputs from the former Supreme Court Judge, BN Srikrishna.
3. Preventing digital colonization by digital e-commerce business such as ensuring checks on accessibility of data harvested and taken to servers outside the country.
4. Affect other initiatives like DNA Profiling Bill as it violates the right to privacy

Way forward

An institutional mechanism such as Privacy Commissioner should be constituted to prevent unauthorized disclosure of or access to such data.
National cyber cell should be made well capable of dealing with any cyber-attack in the shortest time. Implementing National Cyber Security Policy, 2013  and addressing the issue of Data and identity theft.
We need to educate people on the risks involved and highlight examples of Digital fraud and Safe cyber usage policies.
Laws need to be updated to fix accountability for Multi National Companies that stores Data’s outside national borders by enacting concrete Privacy Laws.

As more and more Bank accounts and Direct Benefit Transfer (DBT) are linked with Aadhaar it becomes imperative to build a robust security infrastructure. With that, the new security measures are a welcome step in ensuring data security and in tune with upholding individuals fundamental right to privacy.