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Small savings rate to remain same

February 17, 2005 15:29 IST
Source:PTI
The government is yet to decide on revising interest rate on small savings and linking it to inflation, as recommended by a committee headed by Securities and Exchange Board of India, chairman G N Bajpai.

"Implementing the recommendation is an option not an obligation," expenditure secretary D Swarup said on Thursday, when asked whether government would revise the small savings rates now standing at 8 per cent.

The Bajpai panel is understood to have suggested a slew of measures like linking the small savings rate with inflation so as safeguard investors against rising prices.

Earlier, the Y V Reddy panel had suggested that small savings rate be benchmarked with the weighted average yield of government papers of same maturity.

However, the earlier NDA government could not implement the Reddy panel suggestion as it would have led to reduction in the small savings rate.

The present UPA government is also under pressure from Left parties in retaining the small savings rates.

Source: PTI
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