BJP Government Withdraws Interest Rates Cuts On Small Savings Schemes 24 Hours After Announcement

Now embarrassment for the Narendra Modi government. The finance ministry has rolled back the cut in small savings interest rates hours after it was announced. The opposition now slamming the government claiming that the rollback was motivated to keep in view elections in the five states including that West Bengal.

A hefty cut in small saving interest rates is announced late Wednesday night. The government opting for an updated 1.1% cut in returns for a range of saving options used by senior citizens, the middle class, and other small investors. The most popular options like Sukanya Samriddhi Yojna, public provident fund, and National Savings certificates.

Amid a hue and cry by political rivals, the government took a U-turn merely hours later. Early on Thursday, Finance Minister Nirmala Sitharaman tweeted withdrawing the interest rate cut assuring investors their savings will get the same rates prevalent last fiscal. The FM interestingly blamed a bureaucratic oversight for the ill-timed move to cut interest rates. While the minister called it an oversight, such moves are cleared by the finance ministry stop Ross.

Sources say the BJP leadership was worried about the impact of interest caught on elections. West Bengal where the BJP is locked in a direct fight with TMC for power has the highest small savings deposits and depositors.

The opposition says the government rolls back the rate cut fearing a backlash. Former finance minister P. Chidambaram claimed the move to slash interest rates was an assault on the middle class. Congress General Secretary Priyanka Gandhi Vadra claimed rate cuts we’ll be back after state polls.

It is withdrawn only because elections are going on because it became a big thing in the media. So the finance ministry decided to withdraw that reduction of interest rate, but it tells you there is no empathy there is no compassion. There is no thought behind the poor in this country. They are just trying to make sure that the rich get richer and the poor get poorer.

The U-turn on an interest rate cut on small savings is going to haunt the government. The opposition is going to levy political dividends and the current economic scenario is going to tax it. But the government is saying that not raising full prices during election season. And also withdrawing interest rate cut means bad economics sometimes big good politics.