The Y V Reddy expert committee on administered rates has proposed the constitution of a National Small Savings Authority (NSSA) under the ministry of finance to manage the national small saving fund (NSSF) with regard to all fresh flows.
The central government, all the states and union territories would be members of the NSSA. At present, the different small saving schemes are governed by different Acts of Parliament. As a part of consolidation, the committee has proposed a Small Saving Act which may be enacted with new features.
It should be an umbrella legislation which encompasses all aspects of small savings and will supercede earlier legislations. The committee has suggested that the new legislation may be drafted in consultation with representatives of major stakeholders.
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The NSSA would be responsible for all fresh mobilisation of small savings, its transfer and the settlement of accounts and would also monitor the entire operations of small savings closely in line with the policy prescriptions. The NSSA would be responsible for the following
* Introduction of new schemes, modifying or withdrawing existing schemes;
* Determination of the terms of the schemes like period, eligibility of investors, etc;
* Determination of the methods and forms of transfer of resources on a back-to-back basis to the states.
It will also decide the terms and conditions of the delayed payment with regard to the last date of withdrawal, penal rate of interest, if any, as well as steps to be taken in case of defaults by any states including moratorium on the issue of fresh mobilisation, etc. It will also invest the mobilised savings of states, which do not want their share in the small savings.
The NSSA would have an executive committee consisting of representatives of ministry of finance, some state governments and a permanent invitee (not a member) from the RBI in advisory capacity, for taking care of the operations of the fund. The committee has also said that the NSSA may prepare a statement showing sources and uses of funds on a regular basis (monthly or so) for close monitoring of flow of funds relating to small savings.