New Delhi, Dec 28, 2016: The Law Ministry has turned down a proposal made by the Finance Ministry that a person investing in small savings schemes, be made to link accounts to his or her Aadhaar number.
The finance ministry, post demonetisation move had sought Law Ministry’s suggestion on whether Aadhar submission could be made compulsory for small savings schemes like Public Provident Fund, Kisan Vikas Patra, Senior Citizen Saving Scheme, National Savings Certificate and Sukanya Samriddhi Yojana.
The suggestion by Finance Ministry’s Department of Economic Affairs (DEA) was that some people avoid scrutiny by depositing cash below Rs 50,000 into several small savings accounts because such deposits (below Rs 50,000) do not seek details PAN details.
The Law Ministry rejected DEA’s proposal on October 4 stressing that such schemes cannot be notified as “service within the meaning of Section 7 of the Aadhaar Act” since small savings are serviced under the Public Account Fund of India and not the Consolidated Fund to which the Aadhaar Act applies.
Section 7 of the Act states that the government can ask an individual to furnish his Aadhaar number to establish his identity “as a condition for receipt of a subsidy, benefit or service for which the expenditure is incurred from, or the receipt therefrom forms part of, the Consolidated Fund of India”.
On December 14, Law Ministry reiterated its earlier opinion and directed that all transactions relating to these schemes should be accounted from the Public Account Fund as per the National Small Savings Fund (Custody & Investment) Rules.