The Hindu Business Line : PPF schemes

There appears to be an ill-advised move to scrap the Public Provident Fund scheme, which is a convenient and popular savings instrument, particularly for the middle-income group.

With the backing of the government, court non-attachment, providing positive real interest rate of nearly 2 per cent or so, after discounting the inflation, it is the ideal savings scheme for the general public, with flexible payment convenience without periodical monthly commitment.

In the absence of alternative pension and old age security schemes, there is no urgent need to scrap the PPF.

Certain aspects may be fine-tuned to suit the present day requirement, instead of taking away the benefits attached to the PPF scheme at one go. Slowly, people can accumulate savings for long term commitments such as education, marriage, retirement, and the like without going beyond their budget.

At the same time, they need not take the risk of falling prey to get-rich-quick schemes, that fraught with risk not everyone is able to bear.

A developing country like India should factor in aspects such as the country's huge senior population, the fact that not everyone is financially savvy and prevailing Voluntary Retirement Schemes that are gaining momentum before planning to scrap such long term savings schemes.

Hope the authorities in power see the reasons behind the popularity of the PPF scheme.

R.S. Raghavan

Bangalore

Letters to the editor and contributions can be sent by e-mail to: bleditor@thehindu.co.in

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