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February 28 |
‘5'
BUDGET 2001-2002 -- HM’S REACTION
Union Home Minister, Shri L.K. Advani has given the following Reaction on the Budget 2001-2002:‘An extremely difficult economic situation has been handled by the Finance Minister with competence and finesse.
Shri Yashwant Sinha’s has been a remarkable achievement. He has taken full care of the health of the economy, and simultaneously seen to it that the common man is not burdened.
This year’s budget reveals a fourfold concern; concern for fiscal discipline, and for stimulating growth on the one hand and concern for the farmer and the weaker sections on the other.
On the whole, the Budget has enormously reinforced the Government’s credibility with the country as a government which means what it says.
No wonder, at the end of the 100 minute eloquent speech of the Finance Minister, the Opposition was seen virtually dumb founded struggling vainly to discover vulnerable spots to attack the Budget.
'15'
INTEREST RATES ON SMALL SAVINGS SCHEMES AND PUBLIC PROVIDENT FUND REVISED - PRESS NOTE
The interest rates on small savings instruments were last revised on 15.1.2000 to align them with the overall interest rate structure. The Government accepted the recommendation of a committee of experts on small savings for benchmarking of the interest rates on small saving schemes to the rates of similar instruments in banks/financial institutions. The committee had recommended that this exercise be conducted on an annual basis.
Small savings schemes offer a risk free investment with considerable tax incentives. Pursuant to reductions in other interest rates over the past year, the interest rates on small savings instruments at present are generally higher than those prevalent in the market on similar instruments. Also, the interest rates on these small savings instrument need to be discounted on account of the complete security arising from the sovereign guarantee they bear.
The interest rates on most small savings instruments and Public Provident Fund are being revised downwards by 1.5%. The changes will be effective from 1.3.2001.The table below details the rates of interest after 1.3.2001.
Rates of interest (%)
SMALL SAVINGS SCHEMES |
W.e.f. 1.3.2001. |
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1. |
Post Office Savings Account (Individual account) |
3.5 |
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2. |
Post Office Time Deposit 1 year |
7.5 |
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3. |
Post Office Time Deposit 2 year |
8.0 |
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4. |
Post Office Time Deposit 3 year |
9.0 |
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5. |
Post Office Time Deposit 5 year |
9.0 |
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6. |
Post Office Recurring Deposit 5 year |
Amount repayable on an account of Rs. 10 denomination on maturity– Rs.758.53 |
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7. |
National Savings Certificate VIII Issue |
Amount inclusive of interest, payable on certificate of Rs. 100 denomination at maturity – Rs. 174.52 |
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8. |
National Savings Scheme, 1992 |
9.0 |
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9. |
Kisan Vikas Patra |
Doubling in 7 years 3 months |
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10 |
Post Office Monthly Income Account |
9.5 (Plus 10% maturity bonus) |
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11 |
Public Provident Fund 15 years |
9.5 |
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12 |
Deposit Schemes for Retiring Government/ PSU Employees |
8.5 |
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The maturity values for pre-mature encashment in National Savings Certificate VIII Issue and Kisan Vikas Patra are also being accordingly reduced.
In order to allow time to the various Post Offices and Banks to make necessary arrangements for effecting the above changes, the acceptance of deposits under all the above Schemes except for Public Provident Fund are being suspended with immediate effect. These will re-open not later than March 7, 2001.
The Government has also decided to pass on the benefit of the lower interest cost on small savings schemes to the State/UT Governments by reducing the rate of interest on Special Securities of the State/UT Governments to be issued against their share of the small savings collections by 1.5%. Consequently, the rate of interest on these Special Securities of the State/UT Governments will be revised from 12.5% to 11% per annum.
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