On Thursday, finance minister Nirmala Sitharaman said the government will roll back a steep interest rate cut on small saving schemes such as PPF and NSC, saying it was an oversight, a move seen as an attempt by the BJP to contain the fallout of a decision hitting the common man in the ongoing elections in West Bengal, Assam and three other states.
While the government routinely announces interest rates for small saving schemes at the end of every quarter, the Wednesday’s decision to cut interest rate by up to 1.1 per cent across various small savings schemes, including the National Savings Certificates and Public Provident Fund came a day before the second phase of polling in West Bengal including the political hotbed Nandigram, from where West Bengal chief minister Mamata Banerjee is contesting.
The decision to rollback citing “oversight” was taken hours after announcing the steepest cut in the rate on small savings schemes. “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 Orders issued by oversight shall be withdrawn,” Sitharaman said in an early morning tweet.
Interest rate on Public Provident Fund was reduced by 0.7 per cent to 6.4 per cent while National Savings Certificate was to earn 0.9 per cent less at 5.9 per cent. The highest cut of 1.1 per cent was effected in the one-year term deposit. The new rate was brought down to 4.4 per cent as compared to 5.5 per cent. Interest rates for small savings schemes are notified on a quarterly basis.
Congress said one can imagine the functioning of the economy when such a duly approved order affecting crores can be issued by an “oversight”. Once restored, PPF and NSC will carry an annual interest rate of 7.1 per cent and 6.8 per cent, respectively.