A bill to allow voluntary use of Aadhaar as an identity proof for opening bank accounts and procuring mobile phone connections was introduced in the Lok Sabha on Monday amid opposition.
The Bill will amend the Aadhaar Act 2016 and replace an ordinance issued in March.
It also proposes stiff penalties for violation of norms.
Opposing the bill, Revolutionary Socialist Party MP NK Premchandaran said it was a "grave violation" of the Supreme Court's judgment on Aaadhar.
He claimed private entities can get hold of Aadhaar data and violate fundamental rights especially the Right of Privacy.
Responding to him, Union Information and Technology Minister Ravi Shankar Prasad said Aadhaar is a valid law, it is in national interest and doesn't violate privacy.
He said so far more than 60 crore people have taken mobile Sim cards through Aadhaar and now it is not mandatory.
Suggesting the bill is in line with the apex court judgment, Prasad said people of India have accepted Aadhaar.
The bill proposes to allow voluntary use of Aadhaar number for authentication and identity proof in opening of bank accounts and procuring of mobile phone connections.
The Bill also seeks to give a child an option to exit from the biometric ID programme on attaining 18 years of age, while stipulating stiff penalties for violation of norms set for use of Aadhaar and violation of privacy.
The move is aimed at making Aadhaar people-friendly.
It also paves the way for use of alternative virtual identity number to conceal actual Aadhaar number of an individual.
The bill also proposes deletion of section 57 of the Aadhaar Act relating to use of biometric identifier by private entities.
This amendment will also prevent denial of services for refusing to, or being unable to, undergo authentication.
Besides this, the proposed amendments provide for establishment of Unique Identification Authority of India Fund, and confers enhanced regulator-like power on the UIDAI.
The changes proposed in the bill also include a civil penalty of up to Rs 1 crore on entities that violate provisions of the Aadhaar Act, with an additional fine of up to Rs 10 lakh per day in case of continuous non-compliance.
Similarly, unauthorised use of identity information by a requesting entity or offline verification seeking entity would be punishable with imprisonment of up to three years with a fine that may extend to Rs 10,000 or in case of a company with a fine of up to Rs 1 lakh.
Punishment for unauthorised access to Central Identities Data Repository as well as data tampering is proposed to be extended to 10 years each from the current three years.