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No ‘Threat’ To Small Savings Rate

Millions of investors would have been affected if the rate was reduced

For all those worried about the noise emanating from various bureaucratic-banking-political circles that the interest rate on small savings schemes must be reduced, here is a pick-me-up.

The government is in no mood to bring in revisions in interests rates on these schemes that may have impacted millions of people. The amount of reduction that was bandied about was 25 to 50 basis points.

"There is no proposal to revise the rate of interest on various small saving schemes," said minister of state, Namo Narain Meena, Economic Times reports.

The last time this was done was way back in 2003 when PPF rate was reduced to 8 per cent.

While the government may have been inclined to do so, but it was prevented from doing that due to the pressure from the Left parties and other constituents of the United Progressive Alliance during its previous term.

The small savings receipts in 2008-09 were Rs 1,43,668 crore, while outstandings were at Rs 5,44,340 crore.