The Central Government has announced they have decided to withdraw interest rate cut order on small savings schemes. This announcement was made by the government on Thursday. The Finance Minister of India, Nirmala Sitharaman has announced through her social media handle Twitter regarding this withdrawal. She has informed that interest rates of small savings schemes of the Government of India shall continue to be at the rates which existed in the last quarter of 2020-2021. She further added that all this means that the rates which were prevailed as of March 2021. However, the orders which were issues oversight have been withdrawn by the government.
Finance Ministry Circular on interest rate
Recently on Wednesday, The Finance Ministry has circulated a circular. In that circular, the Ministry has announced that the interest rate on small savings deposits has been reduced to 3.5% from 4% for the first quarter of 2021-2022. However, in addition to this, the most popular scheme which would have been affected is the Public Provident Fund. Earlier PPF was announced to have a rate of 6.4% which has reduced from 7.1% earlier. In addition to this, the interest rates in National Savings Certificate will be 6.8% against 5.9% which was announced. Later it was also found that for those in Kisan Vikas Patra the interest rate will be 6.5% against the 6.2% which was announced. Among these, the highest rate will be fetched by Sukanta Samridhi Account Scheme bat 7.6% against 6.9% announced.
Government slashed rates of small savings schemes by 70-140 bps
Earlier the Government has announced a cut in the small savings rates by 50-100 basis points. These rates have been announced by the government for the first quarter of the new financial year. Now it is for the second time that the government has taken this decision to cut the interest rates. In the April June quarter of 2020-2021, the government has slashed the rates of small savings schemes by 70-140 bps.
Depositors are unhappy
It was observed that this is the second time in the same year that the government has taken this decision to cut the interest rates. It was observed that millions of depositors were not happy with the cut in the schemes.