NEW DELHI: Expressing concern over decline in deposits in various Post Office Small Savings Schemes (POSSS), newly-appointed Minister of State for Communications and Information Technology Jyotiraditya Scindia has urged Union Finance Minister P. Chidambaram to revise interest rates of these schemes to save investors from incurring financial losses.
In his letter to Mr. Chidambaram, Mr. Scindia has pointed out that his main cause of concern was the present interest rates due to which investors of these schemes were facing financial losses.
“It would be pertinent to point out that a large number of customers availing these schemes are small investors residing in rural areas and are being deprived of the financial benefits of a higher rate of interest offered by banks and financial institutions,” he said.
Acknowledging that though the Ministry of Finance has recently taken some steps like restoration of 5 per cent bonus on monthly investment scheme (MIS), tax benefit on investment in five-year time deposit and senior citizen saving scheme, Mr. Scindia said these are insufficient to attract deposits in POSSS.
“Unless interest rates of these schemes are revised upwards, there may not be any change in the present situation due to which POSSS will keep losing their attractiveness rapidly,” he said.
In his letter to the Finance Minister, Mr. Scindia also mentioned the earlier communication from former Minister of Communications and IT Dayanidhi Maran in 2006 and follow up letters by other senior officials of his ministry on the issue.
Dip in savings in POSSS is also affecting the financial condition of the Department of Posts. “Decline in deposits in POSSS is resulting in less growth in remuneration being received by the Department of Posts from the Ministry of Finance as well as overall small savings mobilisation,” Mr. Scindia added.