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Reduction in Interest Rates on Small Savings Heartless: Congress

The party said the decision had come at a time when people were already suffering due to COVID-19 outbreak. 

Updated
India
2 min read
The government has cut small savings interest rates.
Representational image.
i

The Congress on Wednesday termed the cut in interest rates on small savings as a heartless and shameful act, and demanded its immediate rollback.

Congress spokesperson Jaiveer Shergill said the reduction in interest rates on small savings is irrational, illogical and ill-timed as it has come at a time when people are already facing hardships due to the lockdown and economic recession.
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The 21-day lockdown was imposed in the country from 25 March to check the spread of coronavirus.

Shergill demanded that the government waive interest on EMIs for the three-month period from March to June, saying the moratorium in EMIs is merely hogwash and a postponing exercise.

The Congress leader also asked that the government comes out with a second tranche of economic relief packages to help small and medium enterprises, and the poor and common people from the economic downturn the country is facing.

“The BJP government’s decision to cut interest rates on small saving schemes is a heartless and shameful act that will hit the common people, especially the farmers, middle class and the poor who are already suffering due to the downturn in the economy,” Shergill told reporters at a press conference held through video conferencing.

“The decision to reduce interest rates on small savings is ill-timed, illogical and irrational. It will snatch the incomes of 90 crore people in the country.”
Jaiveer Shergill, Congress spokesperson

Shergill said the government will earn an additional 26,000 crore through this reduction in interest rates and said it should not act like “Sherlock to extract a pound of flesh from the people”.

He said the Centre should instead work towards raising incomes of people instead of shrinking it, for helping them survive this economic downturn.

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Govt’s Decision to Slash Interest Based on ‘Stupid Advice’: Chidambaram

Criticising the government’s decision, senior Congress leader P Chidambaram said it was a wrong step based on “stupid advice”.

He also said though India’s GDP for the last quarter could not be have been more than 4 per cent, it was time to focus on saving people's lives and not the GDP.

“I know that sometimes government acts on stupid advice, but I am amazed how stupid this advice was. While reducing the interest rate on PPF and small savings may be technically correct, it is absolutely the wrong time to do so”, he said on Twitter.

The former finance minister said in times of acute distress and uncertainty about income, people depend on the interest income on their savings. “Government must reconsider immediately and restore old rates until June 30”, he said.

Talking about the GDP, he said after the three quarters’ growth rates of 5.6, 5.1 and 4.7 per cent respectively, the fourth quarter of 2019-20 ended Tuesday. “Q4 growth could not have been more than 4 per cent. So annual GDP for 2019-20 must be a disappointing 4.8 per cent”, he said.

He, however, said, this was the time of discussing growth rate of coronavirus and not GDP. “Once Corona in control automatically GDP will increase”, he said on the social networking website.

(The article has been published in arrangement with PTI)

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