US-based experts have said that the Supreme Court verdict on Aadhaar biometric system has struck a balance between the need for a foundational identity and measures to limit its use, but stressed that the government now urgently needs to pass a legislation on data sharing and privacy.
The Aadhaar project was launched by the previous UPA government, primarily to plug loopholes in delivering benefits of social welfare schemes to intended beneficiaries.
The current NDA government expanded the ambit of the biometric project.
A constitution bench headed by Chief Justice Dipak Misra on Wednesday upheld the constitutional validity of Aadhaar but restricted the government's push to make it mandatory for services such as bank accounts, mobile connections and school admissions.
"The Supreme Court judgement is the culmination of a long and healthy debate on Aadhaar, in the best traditions of a democratic society that India can truly be proud of," Anit Mukherjee from the Center for Global Development told PTI.
The Center is a nonprofit think-tank based in Washington. According to the information on its website, the Center works to reduce global poverty and improve lives through innovative economic research that drives better policy by the world's decision-makers.
Mr Mukherjee, an expert on digital identities, however, said much work lies ahead, especially in improving implementation and creating an enabling legal framework for data protection.
"As the judges observed 'it is better to be unique than the best' - but Aadhaar can aspire to be both," he said.
The Supreme Court, he explained, has ruled that Aadhaar in its present form as a digital biometric ID with online verification and authentication has been beneficial to improve governance in India, even though challenges of authentication remain.
"So, the principle of 'build it first, roll out fast, implement it as scale' has worked," Mr Mukherjee said.
He and two other experts from the Center - Alan Gelb and Kyle Navis - said the verdict builds on the "proportionality" doctrine enshrined in the previous court ruling on privacy.
In that sense, the Aadhaar verdict provides an opportunity to review what has been achieved and how we can move forward, building on areas of strength while addressing the challenges of the future, the experts said.
Referring to the verdict, Mr Mukherjee said Aadhaar can be mandatory to receive any government benefit or subsidy but voluntary when it comes to banking, mobile services etc.
"The big news is that the government can mandate the linkage of Aadhaar with PAN numbers. If you remember, many of the petitions challenging the linking of Aadhaar started when the government asked for Aadhaar holders to link them to their PAN numbers," he said.
Through this judgement, the Supreme Court seems to have permitted the government to mandate the use of Aadhaar both on the expenditure and revenue sides of the exchequer, he said, adding, "This is significant."
Mr Mukherjee said the government now urgently needs to pass a legislation on data sharing and privacy that will take into account the specific requirements of India.
Another major feature of the Supreme Court judgement is the direction by the top court that nobody can be denied their entitlements in case their biometric authentication fails.
This, he said, has been a major criticism of Aadhaar's implementation, especially in Jharkhand, where PDS beneficiaries have faced problems in obtaining their rations.
"The problem seems to be that providers do not use back up options such as iris verification or mobile OTP once fingerprint authentication fails. This needs to be corrected immediately, the government should closely monitor reported cases of denial of rations or non-receipt of pensions, for example," Mr Mukherjee said.