Firstly, Aadhaar is for residents of India, not just citizens. Anyone who has resided for more than half a year in the country can get it. Many places take the Aadhaar number or just a photocopy/print of the image as proof and provide other real identities. Even the passport office has started accepting Aadhaar, which makes it easier for resident, non-citizens to get an Indian passport and claim citizenship. This whole charade is going to hurt Indians of today and future generations for a long time.
It can be obtained by "legal" residents, although I don't think legal residents can get passports on the basis of their aadhar number. Aadhar fundamentally solves the problem of illegal residents and nefarious foreign agents getting valid credentials, but I do agree that there are a lot of corner cases where they have been able to obtain one. Another issue is that ration cards and subsidies accounts (including LPG subsidies in urban areas) can be duplicated - meaning that one person can (and do) open multiple accounts. Tying these to Aadhar will definitely reduce the abuse prevalent in the system.
> It can be obtained by "legal" residents, although I don't think legal residents can get passports on the basis of their aadhar number. Aadhar fundamentally solves the problem of illegal residents and nefarious foreign agents getting valid credentials...
Please see the documentation accepted for proof of date of birth [1] and proof of address [2] to get an Indian passport. Both accept a valid Aadhaar number that can be verified. And an Aadhaar number can be obtained through an introducer without providing documents. Since the government has also claimed that there are fake PAN cards, fake drivers licenses, etc., an Aadhaar number can be obtained by providing those too. It's not as difficult to get a passport and claim citizenship as you think. Aadhaar, in a convoluted way, makes this a lot easier. It does not solve the problem in any way.
As for rations and subsidies, you can read the links tryprasannan has posted or visit Rethink Aadhaar [3] to understand how these claims are erroneous and how people are getting excluded.
