Small savings collections saw a 56.59 per cent reduction from January 2014 to January 2015, according to data from the National Savings Institute, Nagpur. Net small savings collections by all states till January 2015 stood atRs 4,318 crore, against Rs 9,948 crore till January 2014.
Net collections were negative in nearly 11 states, indicating there were more withdrawals than new deposits. Gross small savings by all the states as on January 2015 stood at Rs 1,97,825 crore, an increase of nearly 20 per cent over the previous year.
West Bengal remained the top state in terms of small savings collection, even though it also saw nearly 12 per cent decline in net collections till January 2015, at Rs 1,702 crore.
Small savings used to be a key source of loans for the state under the Left Front government. Over the past few years, a rise in ponzi schemes and falling interest rates on post office small savings schemes had led to a stagnation in the growth of small savings collections. West Bengal’s gross small savings collection stood at about Rs 26,667 crore as on January 2015, an increase of nearly 27 per cent over the previous year.
Second to West Bengal, Uttar Pradesh’s contribution to the small savings pool was the highest. Till January 2015, the net collection by the state was Rs 1,511 crore, nearly 45 per cent less than the previous year’s net collection.
In view of the dwindling small savings collections, the government had in April 2015 marginally revised rates on small savings interest rates.
The interest rate on the Sukanya Samriddhi Account was raised from 9.1 per cent to 9.2 per cent a year for 2015-16 and the interest rate on Senior Citizens Savings’ Scheme was raised from 9.2 to 9.3 per cent for FY16. Those on other schemes were kept unchanged.
Interest rates of small saving schemes are linked to the yield of government bonds.