Caution needed in cutting small savings rates: Jaitley

The government has to move cautiously in the matter of cutting small savings schemes interest rates in order to protect vulnerable sections of society, Finance Minister Arun Jaitley said on Friday.

"We as an elected government have to look at it in addition to the economic principles with a sense of political pragmatism," Jaitley said answering a query on the matter at the Hindustan Times Leadership Summit here.

Citing the example of the Girl Child Scheme launched last year, he said: "If after one year you immediately slash the interest rate down radically, it may not be very politically prudent... therefore you have to move in that direction but you have to move a little cautiously."

Small saving schemes normally pay an interest rate of 8.75 percent, compared to 7.5 percent paid on deposits by state-run State Bank of India.

--Indo-Asian News service

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