Never did anyone know that a single document could work as an identity proof or as a substitute for age old PAN Card. Yes! It seems Aadhaar Card has replaced every single document required for the government transaction. After making it mandatory, for filing tax returns, the latest news byte says that now it has become a must document for entering into share market as well.
Why Aadhaar card has become mandatory for buying shares and mutual funds?
Nandan Nilekani brainstormed Aadhaar Card Program in 2009 with a mission to give an identity to every Indian resident. Though in the initial stages the program faced several hiccups, but slowly and steadily it entered in our lives and became a mandatory document for various government initiatives like Aadhaar based LPG subsidy transfer, Jan Dhan Yojana, issuance of passport, digital locker, voter card linking, pension, for availing crop insurance schemes, opening bank accounts, getting new SIM cards and now buying of shares and mutual funds. The underlying reason quoted by the government is that they want to nip the evil practices like corruption, black money, etc. in a bud. Here’s what Nirmal Jain, chairman of IIFL group has to say.
“Linking financial market transactions to Aadhaar will be an important step to make India a corruption-free country.”
Why Aadhaar Card has taken over all other documents?
Earlier in this year, the government linked Aadhaar card to tax payer’s account number with an aim to prevent the possibility of tax evasion using multiple PANs. The government launched this initiative to get rid of fake PAN cards and tax leakages entering in the financial sector. Aadhaar is the only document with bio-metrics which is unique and therefore it has highest credibility.
Will it affect the financial markets or investment sentiment?
Though this bold move will ensure stoppage of fake de-mat accounts and illegal money entering in the market, but it is believed that there will be certainly a temporary dip in the IPO market.
When the government is planning to launch the initiative?
The deadline for launching this initiative is not decided yet. Looking at the pace of initiatives of the government; no surprises even if a deadline of 31st December 2017 gets announced. As the same is the deadline for Bank – Aadhaar linking.