ForumIAS LATEST
- SFG FRC 2027 | Program starts from 19th Dec. 2026 | Admissions open for Entrance Test Click Here to know more →
- Prelims Test Series (PTS) for Prelims 2027 starts 11th Oct. 2026 Click Here to know more →
- [Pre-order] Ethics Redbook 3rd Edition: Delivery starts from 10th October onwards Click Here to Read More →
- 21 Sept. | GS Advance Program (GSAP) for UPSC 2027 Mains starts from 11th Oct. Click Here to Read More →
Synopsis – The Union government rolls back interest cut on small saving schemes interest rates, blaming the decision on an oversight.
Introduction –
- The finance ministry has reversed its decision to cut interest rates on small savings accounts, citing an error.
- Reversing a rate cut of up to 110 basis points (1.1 percentage points) announced the day before.
- Interest rates on savings deposits have been cut from 4% to 3.5%. The rate of interest in PPF was cut from 7.1% to 6.4.
Reason for the sudden withdrawal of an order
- Due to the elections– The government is attempting to contain the implications of a decision that will affect ordinary citizens in the upcoming elections in West Bengal, Assam, and three other states.
Impact of sudden withdrawing of orders –
- Negative effect on the picture of the bureaucracy’s working – The abrupt rollback decision would damage the bureaucracy’s image.
- Bank aspect- The rollback would make the government’s annual borrowing program of 12.05 lakh crore more difficult. Because the central bank has complained about high small savings rates as a barrier to lower interest rates.
Way forward-
Any deviation or reversal from routine administrative decisions should be scrutinised by the Election Commission
Source – The Hindu
