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Bengal Top of the country in Small Savings Collections
Beating the likes of Uttar Pradesh, Gujarat and Maharashtra (in that order) for three consecutive years, data compiled by the National Savings Institute
(NSI) shows Bengal collected Rs 63,392 crore from small savings schemes of post offices in FY 2016-17, surpassing its gross deposit target by a whopping Rs 6,000 crore.
“This is due to Bengal’s remarkable progress in creating awareness on small savings, which succeeded in making people stay away from chit funds. Hats off to the people of Bengal who have made a complete turnaround by reposing their faith in government savings schemes,” said economist Abhirup Sarkar.
This comes despite successive cuts in interest rates on small savings schemes across maturities, including for Public Provident Fund, with effect from April 1, 2016.
But just five-six years ago, it was a different story. In 2010-11 and 2011-12, Bengal’s deficit on account of small savings earnings were Rs 987 crore and Rs 165 crore, respectively.
The NSI survey reveals that rural Bengal scores much better than urban Bengal in small savings collections. While north Bengal is way ahead over south Bengal, Cooch Behar leads the pack among districts, followed by Jalpaiguri and Darjeeling. Kolkata is the worst district in small savings earnings.
Govt drives drew people away from chit funds
Over the last few years, there have been sustained government campaigns to divert people from chit funds to small savings.
The Bengal government extensively used folk art groups to reach out to the rural mass through street plays, kabigaan and posters.
But reduction in interest rates remains a major concern. “The inflow into small savings schemes has a direct correlation with interest rates. If people lose out on interest, the lures of risky investment schemes will be greater,” said a senior Bengal finance department official.
The central government has sharply reduced interest rates on small savings schemes across the board, including that on Public Provident Fund and Senior Citizen Savings Scheme, to align them with market rates.
The rates on Kisan Vikas Patra have also been lowered to 7.8% from 8.7%. Interest rates on Sukanya Samriddhi Account, a scheme for the girl child, were also cut from 9.2% to 8.6%.
In Bengal, there are over 20 million small savings depositors, and at least 15% of them, or three million people, are from rural areas and economically weaker sections of the state.
The increase in small savings deposits will only help Bengal cut borrowing costs in the long run.