Punjab, which was among Indian states to register phenomenal growth in net collections under different small-savings schemes, has posted negative growth in collections over the last two years.
The net collections under the small-savings scheme in the state, which stood at Rs 3,651 crore in 2004-05 and Rs 3,174.48 crore in 2005-06, fell to Rs 2,097.62 crore in 2006-07. The department of small savings for the state has recorded a fall of Rs 678.25 crore till December, 2008.
Worried over the trend, the state government has taken measures, such as introducing attractive lucky coupon schemes, to improve collections. The finance department of the state plans to take up the matter with the Union home ministry demanding some changes in policy, including revising the rate of interests on time deposits, to make them comparable with banks.
Enumerating the possible reasons behind the declining popularity of small-saving schemes, RK Kaushik, director, small savings department, Punjab, told FE, ?The higher interest rates on bank deposits had wooed investors away from government?s small savings schemes. Lured by better returns, many investors had also switched to real estate and mutual funds. We have taken the necessary corrective steps and hopefully, things will improve by the next fiscal. We will also carry out awareness campaigns for the schemes in the state.?
SC Agrawal, principal secretary, department of finance, government of Punjab, said, ?The negative trend in small-savings collections is seen across the country; in that sense, Punjab is no exception.