National Small Savings Fund. Based on its report in November 2011, the finance ministry now revises the rates of small savings schemes and notifies them on April 1, every year.
The committee also suggested winding up of the Kisan Vikas Patrika and hiking the annual investment limit for the popular Public Provident Fund (PPF) be raised to Rs 1 lakh from the earlier Rs 70,000 per year.
While the report was from the public finance perspective and not really from that of small investors, officials and analysts believe that it has given a boost to such schemes. “The long term objective was always to have market determined rates for such schemes,” pointed out the official.
An earlier committee set up under former RBI deputy governor Rakesh Mohan had also suggested aligning the administered rates on such schemes with market rates. The report was submitted in June 2004 to the finance ministry and some of its recommendations such as scrapping of the erstwhile 6.5 per cent (Tax Free) government of India bonds and deposit schemes for retiring government and public sector employees were implemented.
However, other suggestions such as discontinuation of the National Savings Certificate were not taken up for implementation.