New Delhi: The government has stated that there was a negative growth in Small Savings Scheme of Post Office with withdrawals being higher than deposits into such schemes last year.
“More withdrawals (including redemption on maturity) are noticed than deposits overall in Small Savings Scheme of Post Offices during 2007-08,” Communications Minister A Raja said in a written reply to a question in Rajya Sabha here.
The trend in collections, he said, reflect investor’s preference for other alternative saving instruments.
“De-regulation of interest rates relating to banks, financial institutions and debt markets have also contributed to directing the flow of savings into instruments other than small savings schemes of the government, which are subjected to administered interest rates,” he said.
To sustain the investor interest, the government has extended the benefit of Section 80C of Income Tax Act to investments made under 5-Year Post Office Time Deposits Account and Senior Citizen Savings Scheme. Besides, a 5% bonus has been introduced on deposits made under Post Office Monthly Income Account Scheme.
“With effect from 01 August, 2007, the maximum deposit ceiling of Rs3 lakh and Rs6 lakh under the Post Office Monthly Income Account scheme has been raised to Rs4.5 lakh and Rs9 lakh in respect of single and joint accounts respectively,” he added.