The collections made under the small savings scheme for senior citizens grew more than three times in April, as those eligible hurried to take advantage of the budget move that doubled the deposit limit, a senior finance ministry official said, reported The Economic Times.
The fresh mop-up under the scheme breached ₹10,000 crore in April, the first month when the enhanced limit kicked in, compared with the usual deposit of about ₹3,000 crore for this month, the official.
The budget for FY24 had raised the deposit limit under the Senior Citizen Savings Scheme to ₹30 lakh from ₹15 lakh. The scheme offers an attractive interest of 8. 2% in the June quarter, against 8% in the previous three months. The interests are payable every quarter.
“We have got a very good report on the first month of the Senior Citizen Savings Scheme (with the revised limit). The response has been very robust,” the official said.
Elevated mop-up under this scheme would prop up collections under the National Small Saving Fund, reducing the pressure on the government to borrow from the market to meet the fiscal deficit target.
The government has budgeted ₹4.71 lakh crore from the NSSF in FY24, against the FY23 revised estimate of ₹4.39 lakh crore. The scheme typically has a tenure of five years, with a facility for a three-year extension upon maturity. Premature closure is allowed, subject to a penalty.
