Extending the use of the 12-digit unique identification number, the government has amended the Aadhaar Act to allow its use by state governments to circulate funds through their schemes.

Earlier this week, the amendments to Aadhaar Act to allow its voluntary use as ID proof for obtaining mobile phone SIM cards and opening bank accounts was approved by the Lok Sabha as well as the Rajya Sabha. The insertion of a new clause (section 5A) to allow usage of Aadhaar data by states to implement on their schemes was also approved at the same time.

In section 7 of the Aadhaar Act, which pertains to targeted delivery of financial and other subsidies, benefits and services funded from the Consolidated Fund of India, the words 'or the Consolidated Fund of State,' were added after 'the Consolidated Fund of India.'

With the insertion of the Consolidated Fund of State, state governments can also use the Aadhaar database for better targeting of their schemes.

Speaking on the amendment in the Rajya Sabha, Law and IT Minister Ravi Shankar Prasad said that many states had asked for the addition. He also said that the use of Aadhaar, which helps eliminate duplicate and ghost beneficiaries because of biometric identification, has helped the government save Rs 1.41 lakh crore.