Instead, it appears that they're trying to give citizens more access to and control over their data which seems nice.
That said, the Indian government really don't have a great track record of securing citizens' data. I hope they do a better job this time.
This is the brainchild of Nandan Nilekani. He also developed UPI and Aadhaar. The former is amazing. The latter is... controversial at best. But they really fudged up user privacy, and essentially "tricked" millions into giving up their biometrics and personal info - which were then leaked, stored on US servers, etc. :(
Let's hope they've learnt from their mistakes.
More info about Aadhaar "scandals":
[1]: https://www.firstpost.com/tech/news-analysis/aadhaar-securit...
[2]: https://m.timesofindia.com/city/hyderabad/tdp-app-keeps-aadh...