Prime News, National (New Delhi), December 28:- In a move expected to coax banks to lower their deposit rates, the government has reduced the interest rates on small saving schemes, including National Savings Certificates (NSCs), Public Provident Fund (PPF) and Kisan Vikas Patra (KVP), by 0.2 percentage point for the fourth quarter of the fiscal (January-March).
The PPF and NSCs will earn 7.6% interest from January 1, 2018, while KVPs will earn even less (7.3%), a Finance Ministry notification said on Wednesday.
Earlier, PPF, NSC and KVP were offering 7.8, 7.8 and 7.5% interest, respectively.
Besides, while the Senior Citizen’s Savings Scheme of five-year period will offer 8.3% interest, the Sukanya Samriddhi Yojana for the girl child will now offer 8.1%.
The government retained the interest on savings deposits at 4 %, compounded annually.
The government on Wednesday announced it will undertake additional market borrowing of Rs 50,000 crore in the remaining period of the current fiscal to meet expenditure.
The reduction in small savings interest rates for the next quarter comes after official data showed on Tuesday that falling for the second consecutive month, the total revenue collected under GST touched Rs 80,808 crore in November — down from Rs 83,346 crore in October, possibly also due to the large-scale rate cuts made last month. (MR, Inputs: Agencies).