New Delhi: The Ministry of Finance has withdrawn its order of a massive reduction in interest rates on schemes such as PPF and NSC.
“The interest rates of GoI’s small savings schemes will remain at the rates that existed in the last quarter of 2020-2021, ie the rates that prevailed from March 2021. Assignments issued through supervision are withdrawn, “Finance Minister Nirmala Sitharaman announced.
Congressman Digvijay Singh said the decision to take the step back was taken for fear of alienating the smaller saver and ordinary man with the current state election.
He asked for a promise from the Minister of Finance that it will not be implemented again once the election is over.
Singh also said how “supervision” caused this decision and who is responsible for it.
A major cut in small savings systems would put a strain on savers who depend on income state and social security.
Conversely, it will lower the interest rate, lower the cost of capital and spur the capital and equity markets.
The government revised the interest rate on small savings from 1 April, which has now been rolled back.
The interest on savings deposits would be reduced from 4 percent to 3.5 percent annually, while the Public Provident Fund (PPF) would drop from 7.1 percent to 6.4 percent.
Similarly, the one-year deposit was cut from 5.5 percent to 4.4 percent quarterly. The senior citizen savings scheme lowers the rate from 7.4 percent to 6.5 percent.
The interest rate on national savings certificates has been reduced from 6.8 percent to 5.9 percent, Sukanya Samridhi Yojana from 7.6 percent to 6.9 percent and Kisan Vikas Patra from 6.9 percent to 6.2 percent.
Source: Telangana Today