On March 31, the Ministry of Finance announced that interest rates on small savings plans would be reduced to 1.1% for the first quarter of 2020-2021.
The very next day, presumably fearing a reaction from public opinion, Finance Minister Nirmala Sitharaman withdrew the order, tweeting that it had been “inadvertently issued”.
But who was responsible?
Sitharaman herself, revealed an RTI claim.
The request was filed on April 6 by Kanhaiya Kumar, a resident of Vaishali, Bihar. He asked which “competent authority” had approved the cut and whether the Minister of Finance had been aware of it. In its April 31 response, the finance ministry said Sitharaman herself approved the changes before they were announced.
Kanhaiya also asked which official was responsible for “surveillance” and what action had been taken against them.
“No such information is available,” replied the ministry.
His request for a copy of the approval letter and copies of the “file notes, correspondence and official documents” relating to the tariff revision was refused under the which exempts a public authority from disclosing information. information which may “undermine the sovereignty and integrity of India”, or “infringe the privilege of parliament”, or is “prohibited from being published”.
In addition, Kanhaiya asked if there was a meeting to discuss the interest rate review. If so, when did it take place and who attended? He also requested a copy of the minutes of such a meeting. No such meeting has taken place, the ministry replied.
Small savings plans are a major investment option for a large number of Indian citizens. In 2019-2020, the financial savings of Indian households were held in small savings plans. These include Sukanya Samriddhi Yojana, Public Provident Fund, Kisan Vikas Patra, National Savings Certificate and Savings Scheme for the Elderly.
Currently, the interest rates for most small savings plans range from 4 percent to 7.4 percent.