1. Law Ministry rejects DEA’s proposal to link small savings to Aadhaar

Law Ministry rejects DEA’s proposal to link small savings to Aadhaar

The Law Ministry has rejected 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.

By: | New Delhi | Updated: December 28, 2016 9:09 AM
The act says that the Centre can ask a person to show his Aadhaar number to establish his identity. (PTI) The act says that the Centre can ask a person to show his Aadhaar number to establish his identity. (PTI)

The Law Ministry has rejected 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,before the demonetisation drive had asked for Law Ministry’s suggestion on whether Aadhar’s submission could be made necessary for small savings schemes like Public Provident Fund, Kisan Vikas Patra, Senior Citizen Saving Scheme, National Savings Certificate, and Sukanya Samriddhi Yojana, a report by ‘The Indian Express’ said.

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 since such deposits (below Rs 50,000) do not seek details permanent account number (PAN) details.

The Law Ministry rejected the proposal in October 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.

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The act says that the Centre can ask a person to show 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”.

Not satisfied with the legal opinion, the DEA once again approached Law Ministry to reconsider the October 4 advice, saying that the fresh reasoning for bringing small savings under the Aadhaar ambit was that the “expenditure incurred to campaign for small savings scheme was derived from the Consolidated Fund”.

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