LAW MINISTRY REJECTS FINANCE MOVETO LINK SMALL SAVINGS TO AADHAAR
Ahead of launching the demonetisation drive, the Finance Ministry had sought Law Ministry’s opinion whether Aadhaar submission could be made compulsory for small savings scheme.
The Law
Ministry has turned down Finance Ministry’s proposal that a person investing in
small savings schemes — these attract gross deposits of over Rs 2 lakh crore
each year — be made to link the accounts to his or her Aadhaar number.
Ahead of launching the demonetisation drive, the Finance
Ministry had sought Law Ministry’s opinion whether Aadhaar submission could be
made compulsory for small savings schemes like Kisan Vikas Patra, Public
Provident Fund, National Savings Certificate, Senior Citizen Saving Scheme and
Sukanya Samriddhi Yojana.
The rationale put forth by Finance Ministry’s Department
of Economic Affairs (DEA) was that individuals evade scrutiny by parking cash
below Rs 50,000 into multiple small savings accounts because such deposits
(below Rs 50,000) do not seek permanent account number (PAN) details.
The Law Ministry turned down DEA’s proposal on October 4
saying 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”.
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”.
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.
Quoting a 2001 order of a Constitution Bench of the
Supreme Court, the Law Ministry said “when a statute vests certain power in an
authority to be exercised in a particular manner, the said authority has to
exercise it only in the manner provided in the statute itself”. In fiscal
2014-15, deposits in small savings schemes were Rs 289,080 crore while
withdrawals were Rs 248,667 crore. Source: Indian express. 28.12.2016
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