With reference to the editorial, "Cut in savings rate is a sound decision", interest is the only source of regular income for many senior citizens. A sharp interest rate cut in savings schemes for senior citizens and term deposits is a blow to them. The value of their interest income keeps dipping while the cost of living keeps rising. Medical bills go up in advanced age. Getting proper treatment in government hospitals is quite difficult and treatment in private hospitals is unaffordable.
The government's argument for cutting rates is that it will pave the way for the Reserve Bank of India to trim lending rates of banks. But hardly any senior citizen will apply for a bank loan to buy a car, house, etc.
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One view is that the rate cut is the result of pressure from foreign mutual funds and insurance companies, which contend that if people continue putting their money in secured deposit schemes, where would they get their customers from.
M C Joshi, Lucknow
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