NAGPUR:
Amid concerns over the falling household savings rate, it has been mooted to
revamp the postal small savings plans which include schemes like National
Savings Certificate (NSC) or public provident fund (PPF). In an annual review
meeting of the National Savings Institute (NSI), the agency which manages the
schemes, it was suggested to come up with changes in the existing plans to make
them attractive. This includes incorporating pension and insurance features in
the scheme. NSI is headquartered at Nagpur.
Brainstorming
on the new plans will start soon, after which a formal proposal will be
submitted to the ministry of finance (MoF), a source informed.
Small
savings schemes which were once popular among the middle class have taken a hit
during the last few years. In 2012-13, the withdrawals exceeded deposits by Rs
500 crore. In the current fiscal however, net collections stand at Rs 5500
crore.
At
present, the five year postal monthly recurring deposit scheme has an insurance
component but the benefit is negligible. In case the investor dies in between,
the amount equivalent to the two years' deposit capped at Rs 50 a month is
given. However, this comes to a miniscule sum and it is time that the cap is
revised. But in order to come up with a proper insurance or pension plan an
altogether new scheme may have to be designed, the source added.
During
the meeting, it was mooted by the senior officials to come up with ideas for
new plans or amend in the existing ones. There are chances that the new plans
may have a higher return considering the inflation, sources said. The savings
rates currently are in the range of 26% to 28% as against 30% to 31%, a few years
ago, the source informed.
Apart
from this, there are chances that the returns on NSI's schemes may be increased
by 0.1% in the normal course. Rates are revised in the month of March every
year. Currently, the returns range from 8.5% to 9.3. The highest rates are for
the senior citizens deposits which are sold through banks. With the postal
department in the process of putting in place core banking system it is
expected that managing the schemes would become much easier.
The
money collected through the NSI schemes is accumulated into the National Small
Savings Fund (NSSF), which in turn is used to provide loans to state
governments. If the withdrawals exceed collections then funds have to be taken
out from the NSSF corpus. This year the gross collection stands at Rs 1,11000
crore till October as against Rs1,96000 crore in the entire last fiscal.
Plans
for large-scale campaigns to popularize the scheme were also firmed up during
the meeting. NSI's joint director, A K Chauhan said that the advertisement campaign
including radio jingles would begin soon. The meeting was headed by joint
secretary (budget) from the ministry of finance Rajat Bharvaga and under
secretary RK Thakur.
Source
: http://articles.timesofindia.indiatimes.com
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