The Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 was enacted by the Parliament of India to provide a legal framework for the Aadhaar project. Historically, Aadhaar was launched in 2009 as a voluntary identity number to streamline the delivery of welfare benefits. This Act gave it statutory backing, establishing the Unique Identification Authority of India (UIDAI) to oversee the issuance of Aadhaar numbers and manage authentication.
The Act is crucial in India's legal system as it enables efficient, transparent, and targeted delivery of government subsidies, benefits, and services by using Aadhaar as a proof of identity. It balances service delivery with privacy safeguards, restricting the sharing of core biometric data and imposing penalties for misuse. The legislation ensures that subsidies reach intended beneficiaries directly, reducing leakage and promoting good governance. It has become a cornerstone of India's digital identity infrastructure, impacting areas ranging from banking to social welfare.