With the rate of domestic savings falling to below 30% from a peak of 36.8% due to the economic slowdown, the government on Tuesday relaunched Kisan Vikas Patra (KVP) to encourage people to save more.
Finance minister Arun Jaitley said the KVP would help poor, gullible investors to channelise their savings towards a trusted government scheme instead of some ponzi schemes, where hard earned savings disappear. KVP is also aimed at helping increase savings in the country so that they can in turn be used for nation-building, the minister said.
Jaitley said this simple and safe product, in its first phase, would be a bearer instrument without name of the holder. KVP will be available in the denomination of R1,000, R5,000, R10,000 and R50,000. It has no upper ceiling for investment and can be encashed after a lock-in period of 30 months.
The KVP certificates will be sold through post offices initially, but they will later on be made available to the investing public through designated branches of nationalised banks. However, there won’t be any tax benefit for investment in KVP.