Government’s unceremonious decision to cut PPF interest rates from 8.7 to 8.1 per cent per annum is a body blow for the poor who were already feeling the heat of inflation and rising prices which means their savings would be shrieking each year compared to price rise index. There is a cap on PPF deposits of Rs.1.5 lakh each year and the account will mature only after 15 years which is a long period. The government could have managed this 60 basis percentage gap by keeping rates intact and filling the loss from other multiple sources at its disposal, more so because there are no post-retirement benefits for the people from government be it medical or otherwise.
Yes, interest rates were falling and PPF was giving attractive returns but the rates were stagnant even when bank interest rates were high but who really cares for the poor and middle-class in this country? People pay several taxes in this country and what is left in their pockets is too meagre to survive for even people earning over fifty thousand per month in today’s time of inflation where your EMI’s for home, children’s education, travel and other necessities eat up most of your earnings and one has to survive on borrowings which cost you an bomb. Time for the Modi government to give back something to the people by way of old age medical benefits, post retirement entertainment centres and most other things given by developed nations.
(The views expressed by the author in the article are his/her own.)