Business Daily from THE HINDU group of publications
Sunday, Mar 23, 2008
ePaper | Mobile/PDA Version
Business Daily from THE HINDU group of publications Sunday, Mar 23, 2008 ePaper | Mobile/PDA Version |
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Small Savings Industry & Economy - Economy Markets - Investments 
K.R. Srivats New Delhi, March 22 Gross collections under various small saving schemes have declined by a substantial 22.5 per cent during April-January 2008, indicating waning investor interest in such schemes in this fiscal too. Financial experts attribute this to increased risk appetite of the average investor and availability of wider choice of investment instruments such as unit-linked insurance plans (ULIPs), bank deposits, equities and mutual funds. Till recently, small savings schemes like Post Office Monthly Income Account, National Savings Certificates, etc. were traditionally considered safe haven by the investing public. Gross collections under small savings schemes during April-January 2008 have declined to Rs 1,11,234 crore as compared to Rs 1,43,552 crore in the same period in the previous year. Even in 2006-07, gross collections had recorded a decline over the preceding year. Also, the lower gross collections coupled with higher redemptions from previously issued instruments have resulted in negative net collections under the small savings schemes this fiscal. Official sources pointed out that the investment options available have increased over a period of time both in number and variety. There is now wider choice to investors for their savings. Besides inflation concerns, a lock-in of five to six years in small savings schemes has prompted investors to look at other instruments for achieving higher returns in smaller maturity periods. Moreover, the deregulation of interest rates offered by banks, financial instruments and the debt markets has also played a key role in directing the flow of savings into instruments other than small savings schemes of the Government. Interest rates under these small savings schemes continue to be administered. The Centre had taken a series of substantive measures to promote small savings schemes including extending the benefit of Section 80C of the Income Tax law to the investments made under the 5-year Post Office time deposit account and senior citizens savings scheme from April 1, 2007. Postal saving schemes see dip in collection ‘Small savings decline 21% during 2006-07’ More Stories on : Small Savings | Economy | Investments
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