Govt's decision to slash interest on small savings based on 'stupid advice': Chidambaram

Senior Congress leader P Chidambaram on Wednesday described as a wrong step based on "stupid advice" the government's decision to reduce interest rates on small saving schemes and demanded its rollback.

He also said though India's GDP for the last quarter could not be have been more than 4 per cent, it was time to focus on saving people's lives and not the GDP.

"I know that sometimes government acts on stupid advice, but I am amazed how stupid this advice was. While reducing the interest rate on PPF and small savings may be technically correct, it is absolutely the wrong time to do so," he said on Twitter.

The former finance minister said in times of acute distress and uncertainty about income, people depend on the interest income on their savings.

"Government must reconsider immediately and restore old rates until June 30," he said.

Talking about the GDP, he said after the three quarters' growth rates of 5.6, 5.1 and 4.7 per cent respectively, the fourth quarter of 2019-20 ended Tuesday. "Q4 growth could not have been more than 4 per cent. So annual GDP for 2019-20 must be a disappointing 4.8 per cent," he said.

He, however, said, this was the time of discussing growth rate of coronavirus and not GDP. "Once Corona in control automatically GDP will increase," he said on the social networking website.

"In my view, we should not worry about growth now. The focus should be on saving people's lives whatever it takes," he said.

Chidambaram also expressed concern over the government not announcing the second financial assistance package during the lockdown imposed amid the COVID-19 pandemic.

"That is why I am appalled that the government has not yet announced FAP II after the miserly and disastrous FAP of 25th March," he tweeted.