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The Centre has decided not to extend the Mahila Samman Savings Certificate scheme. This one-time scheme, which was available from April 2023 to March 2025, will not be continued beyond its planned duration, according to a senior government official.
Scheme Overview
- Announcement: The Mahila Samman Savings Certificate was introduced in the 2023 budget.
- Objective: To encourage savings habits among Indian women.
- Interest Rate: The scheme offered an annual interest rate of 7.5 percent.
Key Schemes
- Mahila Samman Savings Certificate
- Senior Citizen Savings Scheme
- Sukanya Samriddhi Yojana
Performance Insights
- The Mahila Samman Savings Certificate, along with the Senior Citizen Savings Scheme, contributed significantly to the collection of small savings.
- The Senior Citizen Savings Scheme saw an increase in the maximum deposit limit, raised from Rs 15 lakh to Rs 30 lakh in the 2023-24 budget.
Future Projections
- Despite strong performance, inflows from these schemes are expected to plateau.
- This may lead the Centre to anticipate lower collections from the National Small Savings Fund (NSSF) for FY25.
Shortfall and Adjustments
- FY24 Shortfall: There was a shortfall of Rs 20,000 crore in NSSF collections.
- Projection for FY25: NSSF collections are pegged at Rs 4.20 lakh crore, lower than the interim estimate of Rs 4.67 lakh crore.
Shifts in Investment Preferences
- Households are increasingly investing in equity markets and mutual funds due to attractive returns.
- This shift is contributing to the anticipated decrease in NSSF collections.
Government Strategy
- The government has acknowledged the potential decline in NSSF collections and has maintained market borrowings at the same level.
- Fiscal deficit funding involves a mix of bond market borrowings, small savings proceeds, and cash balance drawdowns.
Gross Borrowing and Fiscal Deficit
- The government has reduced gross borrowing by Rs 12,000 crore, setting it at Rs 14.01 lakh crore for the fiscal year.
- The fiscal deficit target has been adjusted down by 20 basis points to 4.9 percent.
Multiple Choice Questions (MCQs):
1. What is the status of the Mahila Samman Savings Certificate scheme?
A) The scheme will be extended beyond March 2025.
B) The scheme is discontinued after March 2025.
C) The scheme will be extended for an additional year.
D) The scheme is currently under review for extension.
Answer: B) The scheme is discontinued after March 2025.
2. What was the annual interest rate offered by the Mahila Samman Savings Certificate?
A) 5.5%
B) 6%
C) 7.5%
D) 8%
Answer: C) 7.5%
3. How much did the government raise the maximum deposit limit for the Senior Citizen Savings Scheme in the 2023-24 budget?
A) From Rs 10 lakh to Rs 20 lakh
B) From Rs 15 lakh to Rs 30 lakh
C) From Rs 20 lakh to Rs 40 lakh
D) From Rs 25 lakh to Rs 50 lakh
Answer: B) From Rs 15 lakh to Rs 30 lakh
4. What is the projected NSSF collection for FY25?
A) Rs 3.50 lakh crore
B) Rs 4.00 lakh crore
C) Rs 4.20 lakh crore
D) Rs 4.67 lakh crore
Answer: C) Rs 4.20 lakh crore
5. What adjustment has the government made regarding gross borrowing for the fiscal year?
A) Increased gross borrowing by Rs 12,000 crore
B) Reduced gross borrowing by Rs 12,000 crore
C) Increased gross borrowing by Rs 10,000 crore
D) No change in gross borrowing
Answer: B) Reduced gross borrowing by Rs 12,000 crore