Who greenlit small savings scheme rates cut ‘by oversight’? Nirmala Sitharaman herself

On March 31, the finance ministry announced that interest rates on small saving schemes would be cut by up to 1.1 percent for the first quarter of 2020-21.

The very next day, presumably fearing a public backlash, finance minister Nirmala Sitharaman withdrew the order, tweeting that it had been “issued by oversight”.

But who was responsible?

Sitharaman herself, an RTI request has revealed.

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 if the finance minister had been in the loop. In its response on April 31, the finance ministry said Sitharaman herself had approved the changes before they were announced.

Kanhaiya also asked which official was responsible for the “oversight” and what action had been taken against them.

“No such information is available,” the ministry replied.

His request for a copy of the approval letter and copies of “file notings, correspondence and official records” pertaining to the revision of the rates was denied under the RTI Act provision that exempts a public authority from disclosing information that may “prejudicially affect the sovereignty and integrity of India”, or “cause a breach of privilege of parliament”, or is “forbidden to be published”.

Further, Kanhaiya asked if there was a meeting to discuss the revision of the interest rates. If so, when was it held and who attended it? He also sought a copy of the minutes of such a meeting. No such meeting was held, the ministry replied.

Small saving schemes are a major investment option for a large number of Indian citizens. In 2019-20, 82.24 percent of financial savings by Indian households were held in small saving schemes. They include Sukanya Samriddhi Yojana, Public Provident Fund, Kisan Vikas Patra, National Savings Certificate, Senior Citizens Savings Scheme.

Currently, interest rates on most small savings schemes range from 4 percent to 7.4 percent.