Order on small savings interest rate cuts withdrawn: FM Nirmala Sitharaman

The above image is taken from The Economic Times.

The finance ministry has withdrawn its decision to chop down interest rates on small savings schemes just like the Public Provident Fund (PPF) and also the National Savings Certificate (NSC), terming it an "oversight". They have curbed it right down to 6.4 percent for the April-June quarter from 7.1 percent within the January-March period for the Public provident fund.

And the rate of interest on the National Savings Certificate (NSC) was also slashed to five.9 percent from 6.8 percent, while that for Sukanya Samriddhi Account scheme was moved 6.9 percent from 7.6 percent earlier.

Facing a severe social media backlash over the rate of interest cuts in small savings schemes just like the Public Provident Fund (PPF), Sukanya Samriddhi Yojana, senior citizen savings scheme, current deposit, and a bunch of other such schemes on March 31, the finance ministry has rolled back the choice. In a circular on Wednesday (March 31), the Finance Ministry announced a cut in interest rates for tiny savings schemes for the primary quarter of the fiscal year 2021-22. the speed cuts are within the range of fifty basis points (bps) to 110 bps. The Finance Ministry notifies the interest rates for little savings schemes quarterly. Hours after notifying significant cuts in small savings instruments’ returns for this quarter, the government has backtracked on these sharp cuts. This is often the primary time that the Centre has scrapped the notified rate of interest on small savings schemes after switching to a quarterly interest rate-setting system in April 2016.

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