Congress, CPI-M flay PPF rate cut

The Congress and the CPI-M on Friday slammed the government for the decision to bring down the interest rate for PPF savings, terming it "unfortunate".

"Government's decision to cut PF interest rates is unfortunate.Why are they taking away one of the last avenues of savings in a depressed economy?" tweeted Congress leader Ahmed Patel tweeted.

Communist Party of India-Marxist (CPI-M) general secretary Sitaram Yechury also used the same means to express his protest.

"Small savers are the backbone of our savings. With no social security net, they rely on such guaranteed returns," he tweeted.

Economist Ashwini Mahajan, also the co-convenor of Swadesh Jagran Manch, spoke against the move, noting "it will leave adverse impact on the domestic saving".

"As a student of economics, I feel the authorities must reconsider about the decision. I do not think there was enough and good ground at the moment to slash the interest rate on the PPF," Mahajan told IANS.

The interest rate in PPF has been cut to 8.1 percent from 8.7 percent and to 8.6 percent from 9.2 percent on Sukanya Samridhhi Account (SSA), a senior official of the National Savings Institute (NSI) said earlier in the day.

The five-year National Savings Scheme (NSS) will now fetch a return of 8.1 percent -- down from 8.5 percent.