Small savings schemes interest rate cuts withdrawn: FM Nirmala Sitharaman

Finance Minister Nirmala Sitharaman  has withdrawn its decision to slash interest rates on small savings schemes like the Public Provident Fund (PPF) and the National Savings Certificate (NSC), terming it an “oversight“, on Thursday, April 1.

This is the first time that the Centre has scrapped the notified interest rates on small savings schemes after switching to a quarterly interest rate setting system.

FM Nirmala Sitharaman tweeted, “Interest rates of small savings schemes of GoI shall continue to be at the rates which existed in the last quarter of 2020-2021, i.e., rates that prevailed as of March 2021. Orders issued by oversight shall be withdrawn”.

Meanwhile, the Former Finance Minister and Congress leader P Chidambaram took to his official Twitter handle to criticize the rate cut and called out Sitharaman was phrasing the decision as “issued by oversight,” stating: “Announcement of interest rates on savings instruments for the next quarter is a regular exercise. There is nothing “inadvertent” about its release on 31st March.”

Chidambaram further adds, “The BJP government had decided to launch another assault on the middle class by slashing the interest rates and profiting itself. When caught, the FM is putting forward the lame excuse of “inadvertent error”.

“When inflation is at about 6 per cent and expected to rise, the BJP government is offering interest rates below 6 percent hitting the savers and the middle class below the belt,” Chidambaram concludes.

The interest rate for the five-year Senior Citizens Savings Scheme had also been reduced steeply by 0.9% to 6.5%. The interest on the senior citizens’ scheme is paid quarterly. For the first time interest rate on savings deposits has been reduced by 0.5% to 3.5% from the existing 4% annually.

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