Panel for hiking annual PPF limit to Rs 1 lakh:: Business Line

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A Government appointed committee to review the small savings schemes has recommended that the existing ceiling on annual subscription to public provident funds (PPF) be raised to Rs 1 lakh from the current level of Rs 70,000.

The report of this panel, headed by the RBI Deputy Governor, Ms Shyamala Gopinath, was submitted to the Union Finance Minister, Mr Pranab Mukherjee, here today.

This committee was set up for comprehensive review of National Small Savings Fund (NSSF), with the aim of bringing transparency, market linked rates and other much needed reforms to the schemes.

The Committee has recommended discontinuation of Kisan Vikas Patra (KVP) and continuation of all other schemes with suitable modification(s) in some of them.

It also recommended reducing the maturity period of monthly income scheme and National Saving Certificate (NSC) from six to five years.

Recognising the need for a long-term investment opportunity after discontinuation of KVP, the Committee has also recommended introduction of 10-year NSC scheme.

The Committee has also recommended revision of the rate of interest in Post Office Saving Account from 3.5 per cent to 4 per cent and benchmarking of interest rates on other small savings schemes to rates of G-Sec of similar maturity with positive spread of 25 basis points with two exceptions