Days after a Budget proposal to repeal PPF Act raised scare among subscribers about the safety of their Public Provident Fund deposits, the government on Saturday clarified that all PPF deposits will continue to enjoy same protection as earlier.
The Finance Bill, 2018 has a provision, which if passed by Parliament and enacted, could jeopardise the interest of new PPF subscribers, meaning those who opened PPF account after the passage of the Act.
The bill sought to repeal of the Government Savings Certificates Act, 1959 and the Public Provident Fund Act, 1968 to bring existing schemes framed under these Acts under the Government Savings Banks Act, 1873.
A major disadvantage of the repeal would be that a subscriber’s money in PPF account would be subjected to attachment by a court of law in case he was under any debt or liability which he could not repay otherwise.
The Government Savings Banks Act, 1873, under which the Centre proposes to bring the PPF Act, does not provide any such protection. The PPF Act of 1968 provided the same.
The repeal shall not prejudicially affect the interest of depositors who made deposits or were issued certificates or made contribution to any scheme under the repealed enactments before the commencement of the Finance Act, 2018, the bill said.
However, Economic Affairs Secretary Subhash Garg clarified that all existing, as well as new PPF deposits, would continue to get protection after a section of media raised concern on the provision.
“Public Provident Fund (PPF) Deposits enjoy protection from being attached. All existing protections have been saved while consolidating PPF Act under proposed Government Savings Promotion Act. Existing and new PPF deposits would continue to have this protection,” Garg tweeted in a major face-saving exercise for the government before Parliament re-assembled on March 5 to discuss the Finance Bill in the second leg of the Budget session.
The Finance Bill also made it clear that the structure of PPF scheme would not change due to its merger in the Government Savings Banks Act, 1873.
This implied that interest structure and other things would remain the same.
Deccan Herald
