to reduce rates on small savings schemes, say economistsThe government has a tricky political decision to make over the next couple of days, with the quarterly reset of interest rates on small savings schemes due on June 30. Declining savings“If you go strictly by the formula set for small savings rates, they may need to cut rates to some extent. Some recent auctions of 10-year government securities (Gsecs) have struggled to find takers at the interest rates being offered by the central bank. The RBI has often blamed the high administered interest rates on small savings for poor transmission of its rate cuts in the economy. Small savings rates had been slashed between 0.5% and 1.4% on different instruments in April 2020, bringing the PPF rate to 7.1% from 7.9%.

Source: The Hindu June 27, 2021 16:18 UTC