Financial Daily from THE HINDU group of publications
Thursday, Apr 18, 2002
Financial Daily from THE HINDU group of publications Thursday, Apr 18, 2002 |
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Interest Rates Money & Banking - Interest Rates No rethink on rates Hema Ramakrishnan
NEW DELHI: Pensioners and retiring employees are unlikely to get any additional reliefs in the official amendments to the Finance Bill 2002. Senior Finance Ministry officials virtually ruled out any rethink on the 50-basis point cut in the administered interest rates on small savings, despite the demand by BJP members at the National Executive meet at Panaji. "No more sops are being considered for this segment as the Finance Ministry has already provided some relief to retiring employees by announcing the lifting of the Rs 2 lakh investment ceiling in the Government of India Relief Bonds," said a senior Finance Ministry official. A ceiling of Rs 2 lakh per year on investment in GoI relief bonds was proposed in the 2002-03 Union Budget along with the 50-basis point reduction in the interest rate applicable on these bonds. However, retiring employees in the public and private sector can now continue to invest their terminal benefits in GoI relief bonds without any ceiling. Although the 50 basis point cut in the administered interest rates on small savings would also impact the salaried class, this segment is expected to get some relief as the Finance Ministry is set to restore the 20 per cent tax rebate available to assesses with a gross income between Rs 1.5 lakh to up to Rs 5 lakh.
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