Govt may rejig borrowing plan as small savings rise: Finance ministry

An official from the finance ministry disclosed that the net collections have so far reached 34 per cent of the budgetary target

The government is expected to rejig its borrowing plan to reduce the dependence on markets in the second half of the current financial year, owing to the surge in net collections from small savings, finance ministry sources indicated. 

For the first quarter of the current financial year, the net collections under the small savings fund have witnessed a growth of over 48 per cent compared to the corresponding period last year, during which the increase was around 9.9 per cent.

An official from the finance ministry said that the net collections so far have touched 34 per cent of the budgetary target.  “This increase in the net collections gives us more flexibility,” the official added. 

In the Senior Citizen Savings Scheme alone, there has been a substantial increase of 187 per cent from April-July 2022 to April-July 2023.

The maximum investable amount in the Senior Citizen Savings Scheme was raised from Rs 15 lakh to Rs 30 lakh in the Union Budget for 2023-24.

The Mahila Samman Savings Scheme has also witnessed substantial growth, with the opening of 15.8 lakh accounts and total deposits of Rs 9,611 crore up until July this year. 

The Mahila Samman Savings Scheme is a one-time scheme available for tenure of 2 years. Women can apply for the scheme on or before March 31, 2025. 

While there are no upper limits to the number of accounts, there is a cap on the maximum deposit limit. Additionally, there should be a gap of at least three months between the openings of any two accounts. 

The scheme allows a deposit of a minimum of Rs 1,000 and above in the multiples of Rs 100 up to a maximum limit of Rs 200,000, after which no additional deposits are allowed.

The small savings scheme offers a fixed interest rate of 7.5 per cent with a partial withdrawal option.