She also highlighted that a national data governance policy would be brought out to unleash innovation and research by startups. “It will enable access to anonymous data. The KYC process will be simplified and will be adaptive to a sense of risk based, rather than one-size-fits-all. Financial sector regulators will also be encouraged to have KYC system fully amenable to the needs of Digital India,” she stated.
Delving further, she said for all business establishments required to have a Permanent Account Number, PAN will be used as a common identifier for all digital systems.
Industry observers wanted the budget to address the issue of multiple identities needed for conducting business operations. Currently, enterprises are required to obtain multiple identities (PF, ESIC, PAN, CIN, TAN, etc.) issued by various central and state government departments. This has created a situation wherein there is no single identifier for building corporate compliance and risk profiles. Today’s announcement is one step in that direction.
According to Nikhil Kurhe, Co-founder & CEO, Finarkein Analytics, the first big winning theme on the digital public infrastructure has been DigiLocker. “DigiLocker has had a slow start over the years but has rapidly been activated with strong core utility and anchor use cases. DigiLocker + Aadhar is a robust identity and document layer and will pay a key role in facilitating risk-based KYC. PAN as a common identifier for businesses will again be a central focal point,” says Kurhe.
Kurhe, however, is a little disappointed that Udyog Aadhar wasn’t promoted as highly in tandem with PAN. “The scope and depth of documentation that will be available through DigiLocker is expanding and I expect usage and uptick will naturally follow. A one stop solution/centralized IT system was another recurring theme around KYC with a single window for identity and address updates will also be built on existing identity DPIs,” says Kurhe.
The FM had highlighted that an entity Digilocker will be set up for use by MSMEs, large businesses and also charitable trusts. “This will be towards storing and sharing documents online securely whenever needed with various authorities,” she said.In a major relief to MSMEs, Sitharaman also mentioned in case of MSMEs failing to execute contracts during the COVID period, 95% of the forfeited amount relating to the bid or performance security would be returned to them by government and government undertakings.
To settle contractual disputes of government and government undertakings wherein arbitral award is under challenge in a court, Sitharaman said a warranty settlement scheme with standardised terms will be introduced. “This will be done by offering graded settlement terms depending on the pendency level of dispute,” she added.
