The central government first announced a steep cut on the interest rates on small savings on the last day of the financial year 2020-21 and then reversed the order today morning citing “orders issued by oversight” as the reason.
What were the interest rate cuts introduced?
The Finance Minister took the entire world by surprise by announcing a reversal of the order of cutting interest rates to schemes including National Savings Certificates (NSC) and Public Provident Fund (PPF) that would have hurt the middle and the lower-middle class hardest had the government allowed their implementation.
The government announced a cut of up to 1.1% in interest rates in the first quarter of 2021-22. It would mean reduction of PPF interest from 7.1% to 6.4%; of NSC from 6.8% to 5.9%; of 5-year Senior Citizens Savings Scheme paid quarterly … Read the rest