Interest rates on small savings schemes (SSC) may increase by 0.5 to 0.75 per cent from next month. The government will take a decision on this by the end of this month. With this, more investors can come in these schemes and there will be less need for the government to take additional borrowing to pay higher interest.
The interest rates on it have not changed for the last 2 years (April, 2020). Aditi Nair, chief economist of rating agency Icra, said that a decision can be taken to increase the interest rates of these schemes in the second quarter of the current financial year. This is because the interest rates of government securities have gone up.
That’s why the government will have to pay more interest.
ICICI Bank Chief Economist Sameer Narang says that the borrowings that the government takes from the market are at more than 7 percent interest. In such a situation, he will have to pay more interest on small savings schemes. Among small savings schemes, the highest interest is available on Sukanya Samriddhi Yojana, which is 7.6 percent.
Interest may increase from 0.5 to 0.75 percent
Economists believe that the Finance Ministry can increase the interest rates of these schemes by 0.5 to 0.75 percent from next month. ICICI Bank’s Chief Economist Sameer Narang says that the one-year interest of the government’s Treasury bill is around 6.23 percent.
Also, the borrowings that the government takes from the market are at more than 7 percent interest. In such a situation, he will have to pay more interest on SSC. However, this is also a loan. In such a situation, it is expected that in order to give returns to investors around the benchmark, it will have to increase the interest on SSC by at least half a percent.
Review every quarter
The interest rate on small savings schemes is reviewed every quarter. In this review, the main focus will be on the RBI increasing the repo rate to 0.90 percent twice. Banks have increased the interest rates on fixed deposits due to the increase in the repo rate of RBI. With this, the government can also take a similar decision to retain and attract investors in small savings schemes.
Highest interest on Sukanya Samriddhi
Among small savings schemes, the highest interest is available on Sukanya Samriddhi Yojana, which is 7.6 percent. Interest is getting 7.1 percent on Public Provident Fund, 6.8 percent on National Savings Certificate, 7.4 percent on Senior Citizen Tax Savings and 6.9 percent on Kisan Vikas Patra. These are all long term plans.
Economic growth rate will remain up to 7.8% even after the challenges
India’s growth rate can be 7-7.8% in the current financial year amid global challenges. Strengthening of rural economy due to better agricultural production will support the growth rate. NR Bhanumurthy, Vice Chancellor, BR Ambedkar School of Economics, said, “The global inflationary pressures and the Russia-Ukraine war pose risks to the economy.
However, the economic fundamentals are strong at the domestic level. Nagesh Kumar, Director, Institute of Industrial Development Studies said, “GST collection, exports, PMI etc all point towards a strong growth rate in 2022-23. French economist Guy Sorman said, workers are returning from the city to the villages. This will increase agricultural production and food grains exports.
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