Lok SabhaRajya Sabha

April 5, 2017

Saugata Roy speaks on the issue of interest rate cut in small savings schemes

Saugata Roy speaks on the issue of interest rate cut in small savings schemes

FULL TRANSCRIPT

Madam, I want to speak on a very important issue affecting millions of people of the country. Recently, the interest rates on major saving schemes like the Public Provident Fund, Kisan Vikas Patra, Sukanya Samriddhi and Senior Citizen Saving Scheme were cut by 10 basis points.

As a result the interest rate for PPF has come down to 7.9% from 8%. And for savings scheme for senior citizens interest rate has come down to 8.4% from 8.55%. This is a big hit on the middle classes. This is the lowest interest rate in post office base savings in 40 years.

Last time the interest was reduced in October, 2016 and they are supposed to be reviewed every three months. According to the statistics given by savings institutes in November, 2015, total small savings in the country was 49.51 thousand crore.

The people who trusted the post office have been betrayed by the Central Government. Mainly salary earners from middle and lower middle class families and retired persons keep their money in post office. Many people run their families from monthly income schemes.

Government has not reduced the interest on post office savings bank. But because of cut on these small savings interest rates, now commercial and nationalised banks will reduce interest rates. As a result people will gravitate towards chit funds for higher interest and thus be duped. If banks reduce interest rate then they will able to give money to big borrowers at a cheaper rate. So while middle classes would suffer, big businesses will benefit.

Madam I demand that the cuts in interest rate be withdrawn. Our party has demonstrated in front of Gandhi statue in Parliament on this issue in the morning.

Thank you.