Impact of NSS Interest rate reduction on retirees – Necessary action to safeguard the interests of investors in Budget FY 2025-26

Impact of NSS Interest rate reduction on retirees – Necessary action to safeguard the interests of investors has already been taken in Budget FY 2025-26, Govt. says in Rajya Sabha in reply of a starred question.  See details below:-

Government of India
Ministry of Finance
Department of Economic Affairs
RAJYA SABHA
STARRED QUESTION NO.18
TO BE ANSWERED ON TUESDAY 4th FEBRUARY, 2025

“IMPACT OF NSS INTEREST RATE REDUCTION ON RETIREES”

No.18
DR. MEDHA VISHRAM KULKARNI
Will the Minister of FINANCE be please to state:-

(a) whether Government is aware that cutting the National Savings Scheme (NSS) interest rate to zero will significantly impact financial stability of retirees; and

(b) if so, the details of immediate steps Government will take to mitigate the financial hardship caused by this sudden policy change, particularly for retirees who depend on this scheme for their income?

ANSWER

FINANCE MINISTER
(SMT. NIRMALA SITHARAMAN)

(a) to (b) The NSS-87 & NSS-92 schemes were introduced on 01.04.1987 & 01.10.1992 without any sunset clause. The total active accounts under all Small Savings schemes are 39.92 crore, of which the accounts under NSS-87 & NSS-92 are also at 1.37 lakh & 29,000 respectively. Fresh deposit under NSS-87 & NSS-92 were discontinued from 01.10.1992 & 01.11.2002, respectively. The interest rate applicable under these schemes with effect from 01.03.2003 is 7.5%.

Currently, there are several ongoing small savings schemes which provides avenues of risk-free higher returns to investors e.g. Senior Citizen Savings Scheme with Interest rate 8.2%, Sukanya Samriddhi Account Scheme with Interest rate 8.2% and Mahila Savings Certificate Scheme with Interest rate 7.5%, etc. These could be availed for better returns.

Further, necessary action to safeguard the interests of investors has already been taken in Budget FY 2025-26.