After the Centre withdrew its order to slash interest rates for small saving schemes, Congress leader Priyanka Gandhi took a jibe at Union finance minister Nirmala Sitharaman’s “oversight in issuing order” comment and asked her if the decision to revoke the order was taken in view of the ongoing state elections.
“Really @nsitharaman “oversight” in issuing the order to decrease interest rates on GOI schemes or election driven “hindsight” in withdrawing it?” tweeted Priyanka Gandhi.
Sitharaman on Thursday morning made the announcement 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 Orders issued by oversight shall be withdrawn,” she posted on the microblogging site.
The rollback of the order, which would have dealt a severe blow to hundreds of millions of middle class depositors, comes as West Bengal and Assam vote in the second phase of assembly elections.
The government on Wednesday announced a cut in the 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 June quarter.
The rate of interest of the PPF scheme was cut to 6.4 per cent annually from 7.1 in the last quarter. This would have been the first time since 1974 that the PPF interest was brought down below 7 per cent.
National Savings Certificate (NSC) was to earn 0.9 per cent less at 5.9 per cent.
After the rollback, one-year term deposit scheme will earn a higher interest rate of 5.5 per cent during the first quarter of the current fiscal, while the girl child savings scheme Sukanya Samriddhi Yojana account will earn 7.6 per cent as against the reduced rate of 6.9 per cent.
The interest rate for the five-year senior citizens savings scheme, which is paid quarterly, would be retained at 7.4 per cent.
Accordingly, the interest rate on savings deposits will be restored at 4 per cent annually from the reduced rate of 3.5 per cent. Term deposits of one to five years will fetch interest rate in the range of 5.5-6.7 per cent, to be paid quarterly, while the interest rate on five-year recurring deposits will earn a higher interest of 5.8 per cent as against the reduced 5.3 per cent, news agency PTI reported.