The Union government’s decision to re-launch the savings scheme, Kisan Vikas Patra (KVP), is turning out to be the latest point of contention between the ruling Bharatiya Janata Party (BJP) and the Opposition Congress.
Reacting to Congress allegations that the scheme is a cover to legalise black money, the BJP on Friday said there are inbuilt mechanisms in the design of KVP to verify the source the money.
“The Congress can only think in terms of black money because they have been generating a lot of it. KVP is meant to give attractive savings options to people, particularly, the middle and lower classes of people,” said Shrikant Sharma, BJP national secretary.
The former Finance Minister, P. Chidambaram had termed “suspect” the argument that the scheme would promote savings. “There are other fixed-income instruments which offer better returns,” Mr. Chidambaram had said, putting four questions before the government. Mr. Chidambaram wanted to know whether investments could be made in cash; whether Permanent Account Number was required; and what sort of Know Your Customer (KYC) norms would be followed – all pointing to the possibility of illegal money getting into the scheme.
Mr. Sharma said the KVP has robust KYC norms that require the investor to prove his identity and residence, and PAN card when the investment is above Rs. 50,000. The BJP leader said an extra safety measure in the re-launched scheme is that on maturity, the money will be paid only into the bank account of the investor.
“The scheme has been relaunched to improve the savings rate. Also, there have been several incidents in which people have been duped by Ponzi schemes. KVP is safe and attractive.”