ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Articles By N A Mujumdar

Small Savings and Market Mythology

The report of the Reddy Committee advocates market-determined interest rates on small savings, which it says are "high cost borrowings" for the government. In recommending reduction of interest rates on such schemes, the committee has overlooked the nub of the problem, namely, the government's fiscal profligacy gobbling up huge resources. Besides, fluctuating yields cause uncertainty for the small investor and can adversely affect growth.