The government wants to revive small savings as it is currently not as robust as it should be, Minister of State for Commerce & Industry, Nirmala Sitharaman said here today. “Small savings is backbone of the economy. Small savings is not as robust as it was always. We want to revive it,” Sitharaman said. She, however, did not elaborate on how the government was planning to revive the small savings scenario when interest rates are slipping gradually. Interest rate has come down to maximum 7.6 per cent in post office schemes, a major destination of small savings. Addressing the inaugural programme of a finance conference by Vinod Gupta School of Management, IIT Kharagpur, Sitharaman spoke about small savings in reference to gross capital formation and savings.
Gross domestic savings in India was reportedly 30.43 per cent of GDP in 2015, according to the World Bank. Sitharaman emphasised on the need for transforming Indian economy from an emerging to a formal, upfront economy with traceability of financial transactions and due taxes. GST, demonetisation and digital payments were making this possible, she said, without mentioning the teething problems and concerns of GST from various quarters. She also spoke about the government reforms in capital markets both in primary, secondary and mutual funds space.