The Standing Committee on Finance, which is headed by the BJP's Yashwant Sinha, has rejected the National Identification Authority of India Bill 2010. The committee, made up of MPs from different parties, has consulted over the last few months with a series of experts and government officials as also Mr Nilekani. The panel has diagnosed the current bill as "directionless" and has asked for it to be withdrawn and replaced with a new one. Among the standing committee's concerns are whether the Unique Identification Authority of India (UIDAI) is legally empowered to collect biometric data, and the dangers of it being misused.
The government is not obliged to follow the committee's recommendations - but it has just been humiliated into suspending the reforms it announced for retail, and is unlikely to want a new controversy over another pet project that is not supported by other political parties. So the bill will now be sent back to the cabinet.
The Prime Minister has thrown his weight, so far, behind Mr Nilekani despite objections to the Unique ID card scheme from within his cabinet.
Home Minister P Chidamabram has also objected to the fact that the UIADI's enrollment exercises are overlapping with his ministry's attempts to collect biometric and other data for the national census. That work is handled by the National Population Registrar (NPR).
So far, according to some reports, nearly six million UID cards have been issued across the country.
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