Washington: The International Monetary Fund (IMF) has cautioned that India should take necessary steps while implementing universal identification programmes like Aadhaar to ensure privacy and security controls.

Identifying India as a leader in the biometric identification system, the IMF in its fiscal monitor report on digital governance released here on Thursday said digitalisation can facilitate stronger governance, fiscal transparency and better scrutiny of the budget process.

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"With more than 1.2 billion registered citizens in India's biometric identification system, Aadhaar, the country stands out as a leader in this area," the report said.

"In India, privacy and security concerns led to alternating periods of mandatory and non-mandatory use of Aadhaar in social programmes."

"A court decision is still pending on its compliance with the right to privacy. In a recent data breach in India, it has been reported that 135 million Aadhaar numbers were compromised, underscoring the importance of sound privacy measures," it added.