Chief Minister Shri Virbhadra Singh while presiding over the National Small Saving Advisory Board Meeting here today stressed upon adopting a middle path in respect of managing small savings, as being deposited by the people. The Chief Minister said that the small savings were also beneficial for the people, particularly in rural areas and in areas where there were no banks. He said that people sometimes invest or deposit large chunk of money in Chit Fund companies or other non-banking organisations and there were always chances of getting duped. He also appreciated the small saving scheme such as Sanchayika or post office deposits as it developed the habit of savings amongst the people from Small Saving Schemes (SSS).
Though the rate of interest was @.8 percent on higher side, yet the people believe in deposits in government banking institutions, he added, as finding them more secured place of investment, he said.
As the State Government has to pay interest @ .8 percent more on the loans raised, repercussion were that more than Rs. 30 crore burden has to borne by the State governments in long term as interest amount on the borrowings, which was distinct from market borrowing, where the rate of interest was @ 8 percent.
However, as per financial experts, the states would opt for market borrowings, as they will have to repay less interest on them.
Though the Shyamala Gopinath panel recommended some suggestions which would help investors earn higher interest on small savings schemes such as public Provident Fund or post office deposits, yet the real obstacle was the higher rate of interest on borrowings from Small Saving Funds.
Additional Chief Secretary, Dr. Srikant Baldi detailed that it was on the recommendation of the 14th Finance Commission, that it would be appropriate to exclude the states from the operations of National Small Saving Fund (NSSF) scheme in future, even as they should honour the obligations already entered into in so far as servicing and repayment of outstanding debt is concerned.
The 14th Finance Commission recommended that the State Governments be excluded from the operations of NSSF with effect from April 2015 as since the scheme has been administered almost in its entirety by the Union Government, no part of this fiscal burden, incurred before April 2015 should be passed on to the states. It has suggested that the involvement of states in NSSF scheme be limited solely to discharge the debt obligations.
However, the Chief Minister stressed upon promoting it somehow so that the rural population residing in far off places may take benefit of the scheme. He also suggested to promote the agents by awarding them for best performance basis.
Vice-Chairman, State Small Saving Advisory board, Shri Prakash Karad, earlier, welcomed and honoured the Chief Minister.
General Secretary HPCC, Shri Vinod Sultanpuri, Chief Secretary, Shri V.C. Pharka, OSD to Chief Minister, Shri Rakesh Sharma, Deputy Commissioners from all the districts were also present on the occasion amongst non-official members.