December 28, 2017
Sudip Bandyopadhyay speaks on decrease in the interest rates of small savings schemes
Madam, I rise to speak on the subject that decreases in interest rate available to small savings schemes. What is happening is the Government has slashed interest rate on small saving schemes such as the Public Provident Fund (PPF), National Savings Certificate (NSC) and Kisan Vikas Patra (KVP) by 0.2% for the January-March quarter.
These interest rates have been gradually reduced to a big extent by this government over time:
PPF – 8.7% to 7.6%
NSC – 8.1% to 7.6%
KVP – 8.7% (when launched in 2014) to 7.3%
Madam what I want to mention the government has a fiscal deficit target of 3.2%. It is unlikely to be able to meet this deficit target. Government’s attempts at fiscal discipline should not come at the cost of small savers who depend on the interest rates guaranteed by these schemes. The big attractions of these schemes are the security and attractive returns of the poorest of the poor people.
These schemes are meant for small savers to invest her savings and be assured of return. These small savers are the most affected by these rate cuts. The impact of cumulative rate cuts that have happened since this government came to power is quite high.
AITC previously raised the issue of reduction of interest rates on savings bank deposits for small depositors by the SBI from 4 to 3.5%.
Madam, this is the platform of Indian Parliament. Who will speak on their behalf? They have become the worst sufferer. If their small savings are not protected by the declared interest and if you reduce it gradually they will have no place to raise or reflect their voice. So we think it is better, in spite of so many important issues this is also an issue related to the poorest of the poor people of the country. Let the Government rise to the occasion and respond properly by which they can be protected by all means.