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.
