STOCK MARKET BSE NSE

'Interest rate cut on saving plans had Finance Minister, Election Commission's nod', reveals RTI

Details of communications between the Department of Economic Affairs and the EC received through RTI revealed that the DEA had written to the EC on March 31 seeking its approval on the rate cut.

Published: 14th June 2021 07:43 AM  |   Last Updated: 14th June 2021 07:43 AM   |  A+A-

Nirmala Sitharaman

Finance Minister Nirmala Sitharaman (File Photo | PTI)

Express News Service

NEW DELHI:  The interest rate cut on small saving schemes announced on March 31 and which was withdrawn hours later by Union Finance Minister Nirmala Sitharaman as an "oversight" had the go-ahead of both the ministry as well as the Election Commission (EC), an RTI application filed by this newspaper revealed. 

The RTI reply disclosed the swift movement of letters between the Department of Economic Affairs (DEA) and the EC. The DEA had to seek clearance from the EC as the Model Code of Conduct was imposed due to Assembly polls.

Details of communications between the DEA and the EC received through RTI revealed that the DEA had written to the EC on March 31 seeking its approval on the rate cut. The letter, which was in the "most immediate" category, was sent to the EC with the subject “revision of interest rates for small saving schemes”.

"For the first quarter of FY 2021-22 starting from April 1 and ending on June 30, the rates have been revised with the approval of Hon'ble FM, as per the confidential draft enclosed," said the DEA letter.

The letter also said the elections have been announced and the MCC have been imposed, and in that case, the EC’s approval will be required for all policy decisions. It concluded with a line in bold letters saying, "The matter may be treated as urgent as the revision has to be affected from 1.04.2021."

Considering the issue as urgent, the EC responded the same day with a go-ahead. "There is a structure inside the commission to respond within 24 hours. The panel has to give reply to urgent important matters either deny or accept or clarify," former chief election commissioner OP Rawat said.  

He added that there is a provision in the MCC to not stop any policy-related issues at the national level in case of assembly polls. "There was no need to seek permission in that particular case (saving interest rate revision)," he said.

Rawat said earlier, a lot of such issues used to flood the panel during polls for seeking permissions. However, in 2017, it was decided to form a committee headed by the chief secretary of states. The EC letter addressed to the secretary, Ministry of Finance, (DEA) read: "The Election Commission has no objection, from the MCC angle to the revision of interest rate for small saving schemes and issue of its notification subject to the conditions that no undue publicity should be given and no political mileage may be derived out of it."

While the ministry had cut the interest rate of small saving schemes on March 31 and uploaded the order on the website in the late evening, Sitharaman tweeted about the withdrawal of the revision on April 1 at 7:54 am.

Small saving schemes include Sukanya Samriddhi Yojana, Public Provident Fund, Kisan Vikas Patra and others. Officials said as four states and one UT were amid Assembly polls, the timing of the rate cut was probably seen as counter-productive and the order was withdrawn.

Finance minister took to Twitter to clarify

While Finance Ministry had cut interest rate of small saving schemes on March 31 and uploaded the order on the website, Sitharaman tweeted about the withdrawal of the revision on April 1. "Interest rates of small savings schemes of GoI shall continue to be at the rates which existed in the last quarter of 2020-2021, i.e. rates that prevailed as of March 2021. Orders issued by oversight shall be withdrawn," she said



Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp