Reconsider unkind cut on interest income to help elderly, urges Sr. Citizens Forum
Reconsider unkind cut on interest income to help elderly, urges Sr. Citizens Forum
Ferozepur, May 5, 2020: The senior citizens who don’t have any extra income and are solely dependent on the interest income are not happy over the decision of the government to slash interest rates of various small saving schemes of the banks and postal department as well.
Making an appeal to the government, S P Khera, President, Senior Citizens Forum said the government should give a second thought to several available options, to cushion the impact on less affluent retirees living on interest income with least damage to the monetary policy.
The government has recently announced a significant reduction in interest rates on various small savings including postal saving schemes to bring them in line with comparable bank fixed deposit interest rates. With rates likely to go down further, senior citizens who depend on interest income for survival are naturally upset. The interest earnings from accumulated savings serve as the only available means to protect the real income of senior citizens other than those receiving inflation-indexed monthly pensions.
At the same time, while the income from interest earnings are coming down, the cost of living as reflected in expenditure on food, house rents, electricity bills, medical costs are rising. In other words, the standard of living of the people depending on interest earnings for survival would be squeezed.
Citing the example, Khera said, a senior citizen who used to enjoy the 8.6 per annum rate of interest on the maximum deposit of Rs.15 lacs in SCSS – Senior Citizen Saving Scheme, for a period of five years to earn Rs.1.29 lac will not get interest amount of Rs.1.11 lac – a loss of Rs.18,000 per annum. Likewise, the rate of interest on the MIS – Month Income Scheme has also been reduced from 7.4 percent to 6.6 percent.
Khera said, the small saving rates of the post office schemes remain more attractive with the result the deposits with the post offices have significantly increased. It is necessary to safeguard the interests of retirees, now mostly non-pensioners get the meager amount of family pension from Employees Provident Fund.
It is very unfortunate that the senior citizens, who have put their youth in services of the government, are being deprived of the handsome rate of interest to enjoy a comfortable retired life. It is the responsibility of the government to safeguard the interest of senior citizens, who use these deposits to earn a pension in the twilight of their lives, said Khera.
The government should also think over to exempt tax on interested earned under senior citizens savings scheme which would have a tremendous impact on the lives and morale of senior citizens, who find their standard of living slipping every year as inflation and lower interests rates eat into their income, said S P Khera, President.
