Senior Citizen Welfare Fund

Central government of India has proposed setting up of Senior Citizen Welfare Fund with the sole motive of welfare of senior citizens. Finance Minister Mr. Arun Jaitley has announced the setting up of the fund with the help of unclaimed deposits of Public Provident Fund PPF and Employee Provident Fund EPF. The deposits are estimated to the tune of Rs. 3,000 Crores under PPF and Rs. 6,000 Crores under EPF. This announcement has drawn mixed responses from different quarters of the senior citizens and other employees.

Key Features of the Senior Citizen Welfare Fund

• Chapter VIII of the Finance Bill, 2015 explains the establishment of a Senior Citizen Welfare Fund. Many similarities can be drawn between the Senior Citizen Welfare Fund and Investor Education and Protection Fund, constituted under the Companies Act, 2013.
• The Central Government proposes to source the fund from the unclaimed deposits in any of the following schemes for over 7 years after the account has been declared inoperative. (An inoperative account is an account which has not been operated for a period of 3 years as per Clause 145 (2) of the Finance Bill or an account which has crossed its date of maturity and has been transferred to institutions which manage such inoperative accounts. These institutions are either banks, post offices etc. as notified by the Central Government.
• The fund will be administered by an Inter-Ministerial Committee, headed by a Chairperson. The Committee will be competent to spend money from the fund for satisfying various objectives.
• Any person presenting a claim to any amount which was originally lying with any institution or was had deposited any amount with the institution before the announcement for dissolving the right to claim was made shall have the responsibility to furnish requisite proofs and submit an application for the same. The respective institution will make the deserving payment with suitable interest within a period of 60 days.
• The institutions will timely publish information for such unclaimed amounts before transferring the same to the fund.
• The amount which has been credited to the fund from various institutions will be open for claims for a period of 25 years after which the right will extinguish and the money will be escheated to the government. However, if there are genuine reasons furnished by the claimant then the government might refund the money.
• The accounts of the fund will be open to audit by CAG, regularly. The Central Government will present the annual report and the one furnished by CAG to be laid before the Parliament.

Power of the Central Government

Central government itself will have the following powers in relation to the fund:

1. Amount to be maintained
2. Fund utilisation
3. Composition of the Committee
4. Administration of Fund
5. Procedural directives to hold the meetings
6. It may reject inclusion of any unclaimed amount, institution, class of institutions from the provisions of the fund.

Thus, it will serve as a huge benefit to the beneficiaries as the amount will be used to subsidise the premiums of aged pensioners, BPL population and marginal farmers. As, the Central government has no claim over EPF or PPF so the amendments will have to be made to many laws like Indian Trusts Act, Employees’ Provident Fund Act etc. for its effective and hassle-free implementation.