NEW DELHI: The finance ministry on Thursday rescinded its controversial order slashing interest rates on small savings within 12 hours of issuing it, following social media backlash, panic calls from BJP functionaries of poll-bound states, and a sharply worded directive from the Prime Minister’s Office (PMO).
On Wednesday evening, the ministry had issued an order cutting interest rates applicable on various small savings schemes by 50-110 basis points for April-June 2021 period.
The decision, announced a day before phase-2 voting in Bengal and Assam, drew widespread criticism. Sources said some BJP candidates, too, made calls to the PMO.
West Bengal contributes the most to small savings, according to National Savings Institute data.
Of the total gross small savings collections of Rs 5.96 lakh crore in FY18, collections from West Bengal were Rs 90,000 crore.
Early on Thursday morning, Finance Minister Nirmala Sitharaman took upon herself to do damage control.
“The interest rates of small savings schemes will continue to be the same as in the last quarter of 2020-21. Orders issued by oversight shall be withdrawn,” she tweeted.
Sources said the order was supposed to be made public next week but got out early due to “bureaucratic error”.
“As it was financial year-end closing (March 31), the order went public. It has been corrected now,” said an official.