Shishir Arya | Jun 20, 2016, 03.45 AM IST
Nagpur: In a bid to prevent multiple investments by individuals, the ministry of finance is considering making it mandatory to quote Aadhaar number while parking funds in small savings schemes. The schemes are managed by National Savings Institute (NSI) which has its headquarters in the city.
Under the new government, it has been planned to revamp the NSI. One of the measures include making it mandatory for the investor to quote Aadhaar number at the time of purchasing any of the plans. Deliberations are underway on the issue, said a source in the ministry of finance.
There is an upper limit on investment in the schemes. However, NSI does not have a foolproof system to verify multiple investments over and above the limit. For example, an individual cannot invest more than Rs1.5 lakh in a year in PPF. However, there are instances of same person having multiple investments exceeding the caps cumulatively. Since a single investment is within the limit, it is easy to evade the authorities.
Cross-checking can be done through permanent account number (PAN). But PAN need not be quoted for an investment below Rs50,000, said a source.
Aadhaar on the other hand is used as an unique identity number and any multiple investment can be checked by referring to it. Given the penetration, it is expected that a large number of targeted investors will have an Aadhaar number, said a source.
At present, small savings are being governed through three different laws. These include — Government of India Savings Act, Government of India Savings Certificate Act, and the Public Provident Fund (PPF) Act. There are plans to merge the three statutes into one. This will help in making it easy to govern the small savings products. Most of the plans are sold through post offices, with PPF and senior citizens's savings accounts also available at bank counters. The provision on making Aadhaar mandatory may be included in the unified act, said the source. A system of online reporting of collections in small savings may also be introduced as a part of the revamp measures.
The funds collected through small savings schemes are pooled in the National Small Savings Fund (NSSF). The corpus is used to finance the state government's infrastructure projects. Recently, the government has also introduced a system of quarterly revision of interest rates in small savings products. The second revision is due this month. The rates are pegged with yields of benchmark government securities.
IN A NUTSHELL
There have been cases of multiple investments to park funds over and above the upper limit
PAN can help cross check, but it need not be quoted for investments below Rs50,000
Aadhaar would be used as unique identity number, irrespective of size of investment
Multiple investments crossing limits can be prevented by cross-checking Aadhaar