It’s said to be among the PM’s pet projects. But that’s not what one would infer from some of the recent changes to the Sukanya Samriddhi Scheme. In March, this small savings scheme for the girl child saw several tweaks. Many of the changes are welcome — clarity that the account can be opened for an adopted girl child, allowing deposits for 15 years instead of 14, and enabling electronic transactions — but the devil in the details could derail the objective of the scheme — to build a tidy corpus for daughters.

Egregious, in particular, is how balances in accounts under default will be treated. If a minimum of ₹1,000 a year is not deposited each year, the account defaults. This can be regularised by paying a penalty of ₹50 for each year of default, along with the minimum ₹1,000 for each such year. But if the default is not regularised within 15 years of the account opening, the entire deposit will stand to earn only post office savings bank interest rate on maturity. You diligently deposited much more than the minimum ₹1,000 each year for 14 years, but missed doing so in the 15{+t}{+h} year. Since the time to regularise defaults has passed, all the deposits from the first to the 14th year will now earn a pittance, and not the high rates they would otherwise have got. This is patently unfair.

As is the rule by which a child who returns to India after having lived abroad for a period that labels her a ‘non-resident’: she may no longer benefit from the scheme. This is harsh. Then again, premature account closure even on extreme compassionate grounds such as medical support in life-threatening diseases is not allowed before five years from the account opening. This is clearly ill-advised.

Giving the Government benefit of the doubt, one hopes these are drafting errors. These must be rectified, pronto.

Anand Kalyanaraman Chief Research Analyst

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