(Image source from: hindustantimes.com)

The Indian government today withdrew the order slashing rates for small saving schemes. Union Finance Minister Niramala Sitharaman announced the news through her twitter handle. "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 Orders issued by oversight shall be withdrawn," posted Nirmala Sitharaman on her twitter page. On Wednesday, the Indian government announced a cut on the interest rates on small saving schemes by 1.1 percent that includes National Savings Certificate (NSC) and Public Provident Fund (PPF) for the first quarter of 2021-22.

The interest rate on PPF is reduced by 0.7 percent to 6.4 percent and the interest rate of NSC reached 5.9 percent from 6.8 percent. The interest rate on PPF reached an all-time low since 1974. The interest rates for small saving schemes are revised on quarterly basis. In a one-year term deposit, the interest rate was impacted by 1.1 percent. The new interest rate stands at 4.4 percent which was 5.5 percent earlier. The interest rates of small saving schemes will be linked to the government bond yields, told the Union Finance Ministry in the year 2016. The Reserve Bank of India kept the interest rate in static mode for the fourth time in a row at 4 percent on the concerns of inflationary.

By Siva Kumar