Narendra Modi government on Friday announced a measure that’s already being condemned as considerably anti-people.
It was after the government on Friday decided to slash interest rates payable on small savings including PPF and Kisan Vikas Patra (KVP) in a bid to align them closer to market rates.
As a part of its 16 February decision to revise interest rates on small savings every quarter, the interest rate on Public Provident Fund (PPF) scheme will be cut to 8.1 per cent for the period 1 April to 30 June, from 8.7 per cent, at present.
According to PTI, the interest rate on KVP will be cut to 7.8 per cent from 8.7 per cent, according to a Finance Ministry order.
While the interest rate on Post Office savings has been retained at 4 per cent, the same for term deposits of one to five years has been cut.
The popular five-Year National Savings Certificates will earn an interest rate of 8.1 per cent from April 1 as against 8.5 per cent, at present.
A five-year Monthly Income Account will fetch 7.8 per cent as opposed to 8.4 per cent now. Girl-child saving scheme, Sukanya Samriddhi Account will see interest rate of 8.6 per cent as against 9.2 per cent.
Senior citizen savings scheme of five-year would earn 8.6 per cent interest compared with 9.3 per cent.
“On the basis of the decisions of the government, interest rates for small savings schemes are to be notified on quarterly basis,” the order said announcing the rates for the first quarter of fiscal 2016-17.
Post Office term deposits of one, two and three years command an interest rate of 8.4 per cent but from April 1, a 1-year Time Deposit will get 7.1 per cent, 2-year Time Deposit will earn 7.2 per cent and 3-Year Time Deposit will attract interest of 7.4 per cent.
Five-year time deposit will fetch 7.9 per cent interest in the first quarter as against 8.5 per cent while the same on five-year recurring deposit has been slashed to 7.4 per cent from 8.4 per cent.
Reacting to the announcement, the CPI-M’s general secretary, Sitaram Yechury said, “Small savers are the backbone of our savings. With no social security net, they rely on such guaranteed returns. This govt allows black money to flee and lakhs of crores of NPAs are uncollected. Now,savings of hard-working small savers are attacked. Disincentivising small savings in public institutions, is a bonanza for foreign finance.”
On social media too, users’ reactions have been quite scathing. “Public Provident Fund” was one of the top twitter trends.
Here are some examples of twitter conversation:
With interest cuts in Public Provident Fund (PPF) from 8.7% to 8.1%, it's surely going to hit hard on the salaried personals..
— ArindamBhattacharjee (@Arindam_1104) March 18, 2016
Public Provident Fund : Interest Rate cut. This is what happen when you elect @BJP4India . And I was one of them. Shame on me.
— Priyank Patel (@p4priyankpatel) March 18, 2016
Public Provident Fund rates cut to align with market rates! Why doesn't d govt show similar zeal in aligning petrol rate to Intl. Crude rate
— Vishal Damani (@damani_vishal) March 18, 2016
Pushed to wall on EPF taxation @arunjaitley retaliates, reduces interest on Public Provident Fund PPF & Kisan Vikas Patra KVP
— Narendra Pandey (@ProfNKPandey) March 18, 2016
Tax on #EPF. Taken back under pressure. Now, r cutting rates of interest on Public Provident Fund. y r targeting employees? Shameless govt
— ♡ JαHαNGıR αNSαRı ツ (@ittefaq_se) March 18, 2016
Public provident fund: Middle class is being crushed by the govt. Inflation, high tax ; govt is clueless to revive economy.
— Hemant Suryavanshi (@Hemant_62) March 18, 2016
Why is government obsessed with Public Provident Fund the only social security for employees in unstable private jobs?
— डोम Harishchandra (@DrFundu) March 18, 2016