The Himachal Pradesh Chief Minister Mr. Virbhadra Singh warned the people to not to be allured by chit fund and non-banking deposits they could dupe people sometimes to invest or deposit large chunk of money in Chit Fund companies or other non-banking organizations and there were always chances of getting duped, Mr Singh warned.
While presiding National Small Saving Advisory Board meeting today he appreciated the small saving scheme such as Sanchayika or post office deposits as it developed the habit of savings amongst the people from Small Saving Schemes (SSS).
Mr. Singh also stressed upon adopting a middle path in respect of managing small savings, as being deposited by the people. The Chief Minister said that the small savings were also beneficial for the people, particularly in rural areas and in areas where there were no banks.
Though the rate of interest was at the rate of eight per cent on higher side, yet the people believe in deposits in government banking institutions, he added, as finding them more secured place of investment, he said.
As the State Government has to pay interest at rate if 8 per cent more on the loans raised, repercussion were that more than Rs. 30 crore burden has to borne by the State governments in long term as interest amount on the borrowings, which was distinct from market borrowing, where the rate of interest was at eight per cent. However, as per financial experts, the state would opt for market borrowings, as they will have to repay less interest on them.
Though the Shyamala Gopinath panel recommended some suggestions which would help investors earn higher interest on small savings schemes such as public Provident Fund or post office deposits, yet the real obstacle was the higher rate of interest on borrowings from Small Saving Funds.
Additional Chief Secretary, Dr. Srikant Baldi detailed that it was on the recommendation of the 14th Finance Commission, that it would be appropriate to exclude the states from the operations of National Small Saving Fund (NSSF) scheme in future.
The 14th Finance Commission recommended that the State Governments be excluded from the operations of NSSF with effect from April 2015 as since the scheme has been administered almost in its entirety by the Union Government, no part of this fiscal burden, incurred before April 2015 should be passed on to the states.
It has suggested that the involvement of states in NSSF scheme be limited solely to discharge the debt obligations.
However the State Government continue promoting it so that the rural population residing in far off places may take benefit of the scheme. He also suggested to promote the agents by awarding them for best performance basis.