The Narendra Modi government on Friday kept the interest rates on small savings schemes, including NSC and PPF, unchanged for the fourth quarter of 2021-22 amid the COVID-19 pandemic.
Public Provident Fund (PPF) and National Savings Certificate (NSC) will continue to carry an annual interest rate of 7.1 percent and 6.8 percent, respectively.
"The rates of interest on various small savings schemes for the third quarter of the financial year 2021-22 starting from January 1, 2022, and ending on March 31, 2022, shall remain unchanged from the current rates applicable for the third quarter (October 1, 2021, to December 31, 2021) for FY 2021-22," the finance ministry said in a notification.
The decision also comes ahead of assembly elections in five states — Uttar Pradesh, Uttarakhand, Punjab, Himachal Pradesh and Goa. The schedule of elections is expected to be announced early next month.
According to analysts, the government has kept rates intact in view of upcoming assembly elections in five states.
Uttar Pradesh is the second highest contributor to the small savings scheme after West Bengal. Earlier this year, during the West Bengal assembly polls, the Centre decided to reduce the interest rate. But the finance ministry swiftly revoked a steep interest rate cut of up to 1.1 percent for the first quarter on small savings schemes, citing oversight.
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As a result, the first quarter rates were retained at the level of the fourth quarter of the last financial year. The cut was touted as the steepest cut in many decades. Interest rates for small savings schemes are notified on a quarterly basis.
(Edited by : Jomy Jos Pullokaran)
First Published: IST