Interest rates

Priyanka Chaturvedi writes to Fin Min

January 23, 2022 3:06 p.m. STI

Bombay (Maharashtra) [India]Jan 23 (ANI): Rajya Sabha MP Priyanka Chaturvedi informed on Sunday that she had written a letter to Union Finance Minister Nirmala Sitharaman expressing concern over the steady decline in interest rates interest in small savings schemes which have affected the elderly the most as they depend on such schemes for their basic needs and survival.
Earlier on Friday, Chaturvedi said in his letter: “The steady decline in interest rates in small savings schemes such as the Public Provident Fund (PPF), the Old People’s Savings Scheme (SCSS), the National Savings Certificate (NSC) and the Postal Savings Scheme has the elderly most affected, as they depend on these schemes for their basic needs and survival.”
Currently, interest rates are extremely low given the high inflation. Interest on fixed deposits over the years has fallen from 12% to 5%, she explained.

Post office savings have fallen to around 7% with a 15 lakh cap on investment. In the case of the PPF, it has a cap of just 1.5 lakh per year. Additionally, all of these PPF rings are taxable, the letter reads.
“The drop in interest has made it difficult for older people and retired employees to have enough income to run their households,” she said.
Chaturvedi later in the letter said the lower interest rate leaves them with a lower retirement fund and steady income. The pandemic has also strained the public’s pockets and disrupted the savings plan. Therefore, it becomes the duty of the government to ensure that the burden is not passed on to the public, especially the elderly who constitute about 140 million of the country’s population.
“I request that you please consider and provide a special interest rate on fixed bank deposits keeping in mind the concerns of senior citizens and retirees,” the letter read.
“The Union budget offers the government this opportunity to solve these problems and relieve the people of our country,” the letter adds. (ANI)