Order to Cut Interest Rates on Small Savings Reversed: Sitharaman

As per the earlier announcement, the interest rates were to be slashed with effect from 1 April. 

Updated
India
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Less than a day after the Union Finance Ministry issued a notification cutting interest rates on small savings schemes, Finance Minister (FM) Nirmala Sitharaman announced on Thursday, 1 April, that the order had been withdrawn.

A cut in the interest rates for small savings schemes would have delivered a blow to savers, who depend on these schemes for income and social security.

WHAT DID THE FINANCE MINISTER SAY?

FM Sitharaman said that the interest rates on small savings schemes, including NSC and PPF, shall continue to exist at the same rates as that of March 2021, adding that the orders were issued by an “oversight”.

WHAT DID THE ORDER ORIGINALLY SAY?

As per the earlier announcement, the interest rates on savings deposit was to go down from 4 percent to 3.5 percent annually, while Public Provident Fund (PPF) was to be reduced from 7.1 percent to 6.4 percent.

Similarly, interest on one-year time deposit would have been cut from 5.5 percent to 4.4 percent quarterly while the senior citizens’ savings scheme rate would have gone down from 7.4 percent to 6.5 percent.

The interest rate on National Savings Certificate would have been slashed 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.

OPPOSITION HITS OUT

TMC MP Derek O’Brien, whose party is presently locked in an electoral war with the BJP in West Bengal, has referred to the withdrawal as “egg on face again”.

Order to Cut Interest Rates on Small Savings Reversed: Sitharaman

Meanwhile, CPI(M) leader Sitaram Yechury alleged that the Modi government clearly wanted to destroy peoples’ lives and pointed out that “taking the order back is not going to fool anyone”.

Order to Cut Interest Rates on Small Savings Reversed: Sitharaman

Congress leader Priyanka Gandhi Vadra asked the Finance Minister if it it really was “oversight” or election-driven “hindsight”?

Order to Cut Interest Rates on Small Savings Reversed: Sitharaman

(With inputs from IANS)

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