Statutory backing to Aadhaar will help the Modi government roll out its plan to expand the use of unique identification number to all welfare schemes that add up to around Rs 3.5 lakh crore which will check leaks and save anywhere between Rs 50,000 crore to Rs 70,000 crore every year.
The government's decision to fast-track the parliamentary process by terming the legislation to give legal backing to Aadhaar a money bill is also intended to earn the government political dividends as it will ensure that benefits start reaching the poor from the next financial year beginning April.
The law, once approved by the President, will allow the government to begin leveraging India's biggest identity programme in a variety of banking, tax and service operations. The identity can also be used in private businesses like mobile connection sales.
As the legislation links Aadhaar to disbursal of central subsidies and assistance, the parliamentary approval will accelerate the government's financial inclusion schemes much before 2019 Lok Sabha polls.