The government has addressed concerns regarding the impact of reduced interest rates on National Savings Schemes (NSS) for retirees. The NSS-87 and NSS-92 schemes, introduced in 1987 and 1992, stopped accepting fresh deposits in 1992 and 2002, respectively. Currently, these schemes offer a 7.5% interest rate. However, the government highlighted alternative small savings schemes with higher returns, such as the Senior Citizen Savings Scheme and Sukanya Samriddhi Account Scheme, both offering 8.2%, and the Mahila Savings Certificate Scheme with a 7.5% rate. These options aim to provide better financial stability for retirees and investors. Additionally, measures to safeguard investor interests have been outlined in the Budget for FY 2025-26.
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): A statement is laid on the Table of the House.
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STATEMENT REFERRED TO IN REPLY TO THE RAJYA SABHA STARRED QUESTION NO.18 FOR 4TH February, 2025 BY DR. MEDHA VISHRAM KULKARNI REGARDING “IMPACT OF NSS INTEREST RATE REDUCTION ON RETIREES”
(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.
