Govt keeps interest rates on small savings schemes unchanged for fourth quarter of FY'22

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The decision also comes ahead of assembly elections in five states — Uttar Pradesh, Uttarakhand, Punjab, Himachal Pradesh and Goa. The schedule of elections is expected to be announced early next month.

According to analysts, the government has kept rates intact in view of upcoming assembly elections in five states.

Uttar Pradesh is the second highest contributor to the small savings scheme after West Bengal. Earlier this year, during the West Bengal assembly polls, the Centre decided to reduce the interest rate. But the finance ministry swiftly revoked a steep interest rate cut of up to 1.1 percent for the first quarter on small savings schemes, citing oversight.

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As a result, the first quarter rates were retained at the level of the fourth quarter of the last financial year. The cut was touted as the steepest cut in many decades. Interest rates for small savings schemes are notified on a quarterly basis.