Lately, the Indian government has attempted to completely digitise social welfare schemes, such as ration cards, pensions or health schemes by requiring beneficiaries to link their Aadhaar IDs (that is, their Indian personal identity numbers), or by demanding additional personal data to access benefits. This has resulted in massive collection of sensitive data, including biometrics, caste, religion and health, which is proving to be dangerous as the data is prone to breaches of privacy rights. There is also a growing concern that this data could be used for political manipulation, financial exploitation, and discriminatory practices. The situation poses a particular dilemma for the economically disadvantaged, who must choose between the right to social security and the right to privacy.

These challenges were echoed in the landmark rulings of K.S. Puttaswamy v Union of India-I (2017) and K.S. Puttaswamy v Union of India-II (2018), where the constitutionality of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act 2016 was challenged. Under the Aadhaar Act, every Indian resident is to be issued a unique identity number based on their biometrics and demographic data, formulated with the purpose of streamlining efficient delivery of welfare schemes. Despite the Supreme Court affirming that privacy is an intrinsic facet of Article 21 of the Constitution in Puttaswamy-I, the constitutionality of the Aadhaar Act was upheld by ruling that the regime it created was one of voluntary sharing of personal information, and that the infringement of the right to privacy was proportionate [Puttaswamy-II, 333-373].

At the outset, it is vital to emphasise that the Supreme Court, while denying that the right to privacy is an “elitist construct” [Puttaswamy-I, 154], unanimously held that privacy and the right to social security revolves around the concept of the right to dignity, and stressed on the inter-dependency of the both [Puttaswamy-II, 116]. Further,the voluntary nature of the Aadhaar Act was a crucial factor in the Court’s decision to uphold its constitutionality.[Puttaswamy-II, 333-373].

The principles set by the Supreme Court are directly relevant to the current digitisation of welfare schemes. The digitisation efforts are effectively stripping away the voluntary aspect of the schemes. Even if consent is sought, the consent norms are often flouted and there is a lack of informed consent as the beneficiaries of welfare schemes usually lack digital literacy and a comprehensive understanding of privacy concerns. Notably, the Court remained silent on the issue of informed consent. Consequently, the consent of the beneficiaries of welfare schemes to data sharing is often inadequate and coerced due to the indispensable need to access welfare benefits, thereby contradicting the principle of dignity and the importance of voluntariness endorsed by the Court.

The Court also critically assessed whether the Aadhaar Act was a proportionate infringement of the relevant human rights by going through the four components of the proportionality test: whether the Act pursued a legitimate goal, whether the Act had a rational connection to the goal pursued, whether the Act was necessary, and whether there was a disproportionate impact on the right holder [Puttaswamy-II, 267]. When applying the proportionality test to digitised welfare schemes, it becomes evident that only one aspect of the test is satisfied—the pursuit of a legitimate goal.

In judging the rational connection criterion, the Court considered the corruption in implementation of welfare schemes proving detrimental to the economically weaker class, which justified the digitalisation these schemes under the Aadhaar Act [Puttaswamy-II, 279]. However, it is imperative to consider the failures of digitalised schemes on account of inaccuracy and errors in technology, and social exclusion. Moreover, the infringement of people’s rights for administrative convenience contradicts fundamental principles upheld by the Court [Puttaswamy-II, 378].

In terms of necessity, the failure to explore alternative options, such as anonymous IDs, blockchain technology, or other data minimisation techniques, exacerbates the disproportionality of the data collection process. This is especially concerning for vulnerable persons who may lack digital literacy. It is crucial to note that infringing upon the privacy of the poor deprives them of their dignity and denies them a chance to improve their socio-economic situation, considering the interdependency of socio-economic and civil rights, creating a Catch-22 situation.

The only safeguard lies in the Digital Personal Data Protection Act, 2023, which proves inefficient as it allows government to exempt any of its agencies from all provisions of the Act [section 17(2)(a)]. The exempted agency is not subject to the safeguards prescribed in the Act such as consent, purpose limitation, or collection limitation. As such, the digitisation of social welfare services in service of improved efficiency runs against the principles laid in Puttaswamy, and poses significant challenges to securing the fundamental rights of the economically disadvantaged.