"The legislation has been passed and I'm sure it will stand the test of constitutionality. Even while upholding the idea of privacy as an important constitutional guarantee, the Supreme Court said that it is the question raised just now. (Violation of privacy) could be imposed by law but they have to be obviously reasonable," Jaitley said here at the conclave on financial inclusion organised by the United Nations India.
He said that the right to privacy has illustrative restraints like national security and dissemination of social benefits and Aadhaar is being used for the latter.
"As some of the illustrative restraints, not exhaustive, are in the larger interest of national security or for the purposes of dissemination of social benefits," he said.
That is the principle purpose of which this (Aadhaar) was intended to be used and that is where the interplay of over a billion Aadhaar number, over a billion bank accounts and mobile phones itself has a important role," the Finance Minister said.
Jaitley said that once the identity network is created through Aadhaar, it is used to make sure the social benefits reach those segments of population for whom it is specifically targeted.
"Untargeted subsidy result in wastage of resources because the resource of state are limited," he said.
"There are important questions which arise and therefore (Aadhaar) legislation was necessary and because of evolving detail, the confidentiality of the data and to build some iron wall around the data itself was also equally important," he said.
The case is pending in the Supreme Court on whether the government's move to make Aadhaar-linking mandatory with PAN, is violative of the fundamental right to privacy.
The court has constituted a nine-member bench to adjudicate on the issue. The government will have to prove that Aadhaar comes under the illustrative restraint of dissemination of social benefits.
Aadhaar (Targeted Delivery of Financial and other Subsidies, benefits and services) Act, 2016, which aims to provide legal backing to the Aadhaar unique identification number project, was passed by Parliament in 2016.