Govt rollback of decision to cut rates on small savings – NOFAA

Govt rollback of decision to cut rates on small savings

On 1st April, Finance Minister, Nirmala Sitharaman withdrew the order that steep cuts in interest rates of small saving schemes, including the PPF and NSC, which was announced on 31st March. The announcement was made by Union finance minister Nirmala Sitharaman on Twitter. “Interest rates of small savings schemes of GOI shall continue to be at the rates which existed in the last quarter of 2020-2021, ie, rates that prevailed as of March 2021. Orders issued by oversight shall be withdrawn,”. The government on 31st March cut interest rates on small savings schemes, including National Savings Certificate (NSC) and Public Provident Fund (PPF), by up to 1.1 per cent for the first quarter of 2021-22 in line with falling fixed deposit rates of banks. The interest rate on PPF was reduced by 0.7 per cent to 6.4 percent while the rate on NSC was cut from 6.8 per cent to 5.9 percent.Interest rates for small savings schemes are notified on a quarterly basis. The steepest fall of 1.1 per cent was affected in the one-year term deposit. The new rate stood at 4.4 per cent from the earlier 5.5 per cent.While announcing the quarterly setting of interest rates in 2016, the finance ministry had said that rates of small savings schemes would be linked to government bond yields.
(Attach previous order copy – available on NOFAA whats app)

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