From multiple taxes-one nation to one tax-one nation, India definitely seems to have come a long way. However, better days are yet to come for the common man. For, soon after it was revealed that lots of essential products and services – including insurance premium and banking services – will become costly from July 1 under the new indirect tax regime of Goods and Services Tax (GST), the government on Friday reduced the return on small savings schemes – including Public Provident Fund (PPF), NSC, Kisan Vikas Patra and Senior Citizen Savings Scheme — by 10 basis points, which came as a double blow to the common man and the nation’s honest taxpayers.
It may be noted that you will now be paying more for insurance policies and lots of banking transactions, owing to escalation of GST on supply of services from the current rate of 15% to 18% and given that there is not substantial additional credit pool build up for such service providers. So, whether you are going to withdraw money from the ATM machine or use your credit card, be prepared to shell out more from your pocket. On the other hand, you will now earn less on your hard-earned money deposited in small savings schemes as henceforth they are going to earn less for you. For example, the interest rate on PPF is now 7.8 per cent (as against 7.9 per cent earlier), 5-year Senior Citizen Savings Scheme 8.3 per cent, Kisan Vikas Patra 8.5 per cent and NSC 7.8 per cent.
Some financial experts, however, say that although these rate cuts are not good for small savers and senior citizens, however the reduction will help banks bring down the lending rates which is good for the nation’s economy and the industry as a whole.