small savings scheme: PPF, SCSS, Sukanya Samriddhi, NSC: Govt plans to allow investment using Aadhaar instead of PAN

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The Finance Ministry is planning to relax procedures for deposits under small savings schemes to enable a larger pool of investors, especially from rural India, to take advantage of the schemes, a senior official said.

As part of the KYC relaxation, there would be three procedural changes. First, people will be allowed to invest in small savings schemes by using Aadhaar, instead of the PAN cards, said the official. Given that a much larger number of people in India have Aadhaar cards than PAN cards, this relaxation would encourage many rural depositors to tap the small savings schemes.

“The KYC norms for small savings schemes would mirror those stipulated for Jan Dhan accounts (meant for poor people),” said the official.

Second, the government will ease the procedures for legal heirs to lay their hands on the deposits of a deceased investor where there is no dispute. Third, the process of nomination would be simplified further, said the official quoted above.

Easier procedures would not just offer more flexibility to investors but also potentially boost inflows into the National Small Savings Fund (NSSF). These funds could then be used by the Centre to part-finance its fiscal deficit and somewhat reduce reliance on market borrowing.

The Union government has budgeted its offtake from the NSSF to rise to Rs 4.71 lakh crore in FY24, against Rs 4.39 lakh crore in FY23 (revised estimate).

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