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.
