In her Budget 2023 speech on Wednesday (February 1), Indian Finance Minister Nirmala Sitharaman introduced the government’s approach towards simplifying the know-your-customer (KYC) process. The finance minister proposed how the Permanent Account Number (PAN) card will be used by the government as a common identifier for all digital processes at government agencies.
The changes proposed are likely to streamline the procedure of KYC and would make the management of documentation of PAN cardholders easier for the Income Tax Department as well as other governmental organisations.
Here’s what the finance minister said
In her speech, Sitharaman said, “The KYC process will be simplified by adopting a ‘risk-based’, instead of one-size fits all approach. The financial sector regulators will also be encouraged to have a KYC system fully amenable to meet the needs of Digital India.”
“A one-stop solution for reconciliation and updating of identity and address of individuals maintained by various government agencies and regulators will also be set up using DigiLocker service and Aadhaar as the foundational identity,” the finance minister stated.
“For obviating the need for separate submission of same information to different government agencies, a system of ‘Unified Filing Process’ will be set up. Such filing of information or return in simplified forms on a common portal, will be shared with other agencies as per the filer’s choice,” she added.
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DigiLocker, Aadhaar to serve as “foundational identity”
For citizens, Aadhaar and DigiLocker will work as a “foundational identity”, a one-stop place to change address or identity, which will automatically be reflected across other platforms. For example, currently, if an address is updated in Aadhaar, it won’t get updated on the person’s Income Tax portal registration.
This change reflects how the government is working to synchronise the data of citizens across various portals when only one’s Aadhaar gets updated.
The DigiLocker service is being currently used to store and generate documents like PAN’s electronic version, Aadhaar, degrees, driving licences and academic certificates. In future, this platform will facilitate changing one’s details like an address which will eventually get updated at all necessary portals and in all documents.
(With inputs from agencies)
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