Centre Launches PAN 2.0 Paperless Project; Concerns Over Privacy and Security Loom
The Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi has approved the PAN (Primary Account Numbers) 2.0 project of the Income Tax Department. The financial outlay for the project will be Rs. 1435 crores.
A press release from the CCEA states that the project “enables technology driven transformation of Taxpayer registration services…”.
This e-Governance initiative focuses on re-engineering business processes related to PAN and TAN services to provide taxpayers with an enhanced digital experience. It intends to serve as an upgrade to the existing PAN/TAN 1.0 ecosystem by integrating core and non-core activities, as well as streamlining the PAN validation service.
The PAN 2.0 Project aligns with the Government’s vision outlined in the Digital India initiative by facilitating the use of PAN as a Common Identifier across all digital systems of designated government agencies.
“The existing system will be completely upgraded”, stated Ashwini Vaishnaw, Union Minister of Information and Broadcasting (I&B), during a cabinet briefing.
“There will be a unified portal, …. and (this project) will be completely paperless and online, and there will be a focus on grievance redressal system”, he further added.
During the briefing, Vaishnaw said the government has distributed 78 crore PAN cards to people. The briefing also stated that the project will have “robust cyber security measures.”
Implications
With the launch of Digi Yatra, government labeled it as an “all approved” template for a “paperless and hassle-free” process. However, it raised concerns about linking Aadhaar data to Airlines, Airports, and passenger IDs, which facilitates big data collection for profiling. This approach posed privacy and surveillance risks, especially if Aadhaar linkage became mandatory. The issue of passengers entering airports with fake tickets or possibly using fake identification, such as tampered Aadhaar printouts, could not be fully eliminated while the process remained non-mandatory.
Moreover, the significant and costly risk of biometric authentication failures had prompted passengers to continue carrying printed copies of their documents.
Earlier this year, we further reported on the information shared by Minister of State for Finance Pankaj Chaudhary in the Rajya Sabha noting that compromised Aadhaar numbers and fingerprint biometrics, via mainly land and property registration records, were the reason behind frauds in the Aadhaar-enabled payment system (AePS).
Data Privacy Concerns
Introducing biometric authentication aims to verify identities but proves ineffective as a security measure. For the PAN 2.0 project, PDFs are vulnerable to manipulation, and the entirely “paperless” approach fails to account for the digital divide and unequal access to resources across India. Moreover, a paperless and an online process leaves room for manipulation and can facilitate duplicity. The misuse of PAN details has been a long-standing issue, highlighting the need for modern chip-enabled PAN cards to authenticate the identity of individuals, rather than relying on photocopies. Despite the assurance of “robust cybersecurity measures,” the project’s integration of PAN as a common identifier across various digital systems raises concerns about data privacy. With the vast amount of personal and financial data tied to the PAN number, a centralized and digitalized system could make the information more vulnerable to cyber-attacks or data breaches.
Given that the existing system has faced issues related to data processing times, glitches, and user experience, a smooth transition to PAN 2.0 might encounter technical difficulties, especially in regions with lesser digital awareness. Not all taxpayers, especially in rural or remote areas, have reliable access to the internet or modern technology. The success of the PAN 2.0 initiative will depend on how inclusive and accessible it is for all citizens.
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