Role in Government Disbursements.

By Chinmay Tidke 724 G

---

The term "disbursement" means the act of paying out money especially from a fund allocated by a financial body. Here I will be talking about distribution of funds by the department of post (DoP). Here are few means by which post offices in India play a vital role in governmental disbursements.

Post Office Savings Schemes

1.Post Office Savings Account(SB)

It acts as a normal savings account of any bank, and the account is transferable from one post office to another.

2.National Savings Recurring Deposit Account(RD)​​

Small and poor investors can form a corpus to meet their future needs through the scheme, which can be opened by either an adult or two adults jointly.

3.National Savings Time Deposit Account(TD)

There is a tax benefit for the investment made in the 5-year post office time deposit. The investment qualifies for the deduction under Section 80C of The Income Tax Act, 1961.

4.National Savings Monthly Income Account

Investors are able to earn fixed interest every month by contributing a certain amount in this scheme.

5.Senior Citizen Savings Scheme Account

The Scheme is a savings instrument offered to Indian residents aged over 60 years. The deposit matures after 5 years from the date of account opening but can be extended once by an additional 3 years by the investor.

6.Public Provident Fund Account – Public Provident Fund is a long-term investment scheme declared by the Government of India. It is a safe post office deposit scheme that offers tax exemptions and attractive interest rates as decided each financial year.

7.National Savings Certificate (NSC) – The Scheme is a fixed income investment scheme that one can open with a post office. As part of an initiative from the Government of India, it is a savings bond that encourages subscribers, primarily small or mid-income investors, to invest while saving on income tax.

8.Kisan Vikas Patra Account – Kisan Vikas Patra is a certificate scheme from the post office. It may actually double as a one-time investment in a period of approximately 9 years & 10 months.

9.Sukanya Samriddhi Account – SSY is a savings scheme launched by the Government of India for the financial betterment of the girl child. The scheme enables parents to build capital for the future education and marriage expenses of their female child and provides an attractive interest rate on the investment.

Mutual Funds

The Post Office has historically been a distributor of economic offerings, from cash orders to banking services. The Post Office Savings Bank is the largest retail financial institution within India, running from over 1,50,000 branches. With an objective to leverage the power of the postal network and abilities Department of Posts had started out retailing mutual finances and bonds.

At present select schemes of UTI Mutual Fund only are retailed through the designated post offices in the country through NISM/EUIN certified staff.

National Pension System - All Citizen Model

The National Pension Scheme (NPS) is a voluntary period pension savings scheme set up to pay defined client contributions to a planned savings account to secure the future in pensions. This is an attempt to find a sustainable solution to the problem of providing a decent pension for every citizen of India.

With regular withdrawals from the NPS, consumers can use the pension accumulated under the scheme to purchase a life annuity from a PFRDA-Empaneled Life Insurance Company, as part of the pension accumulation to be withdrawn as apart from money at once, if desired. PFRDA is the nodal agency for monitoring and regulation of NPS.

Electronic Clearance Service (ECS)

The Electronic Clearance Service (ECS) scheme provides an alternative method of effecting bulk payment transactions like periodic (monthly/ quarterly/ half-yearly/ yearly) payments of interest/ salary/ pension/ commission/ dividend etc. The transactions under this scheme move from a single User source (i.e. Banks,Companies ,Corporations ,Government Departments) to a large number of Destination Account Holders (Customers/Investors). This scheme obviates the need for issuing and handling paper instruments and thereby facilitates improved customer service by the Banks and government Departments effecting bulk payments.

IFS Money Order

​International Financial System (IFS) is software developed by UPU to coordinate international remittance services among the partner countries. At present the service is operational with La Poste Group, France and UAE.​ This service is performed by India Post itself. Remittances received under this service are paid through our EMO service. Remittances can be accepted at any of the 17,500 post offices on the EMO network. Amount over INR 50,000 payable by check Max limit is USD 2500. Maximum 30 transactions can be done by an individual per year. Beneficiaries must submit a Unique MO Number (9 digits inside UAE, 26 digits in France) along with valid documents like Voter ID Card, Driving License, PAN Card, Ration Card, Aadhar Card, Passport etc . Such documents are provided by postal workers for their records (KYC Documents).

Overall, India Post plays a critical role in ensuring the efficient and transparent disbursement of government funds and benefits to the intended beneficiaries across the length and breadth of India, especially in remote and rural areas where banking infrastructure might be limited.