Small-savings inflows are down to a trickle
Satya Sontanam
BL Research Bureau |
Updated on
February 27, 2021
Growth in collections in post office small-savings schemes is set to touch a low in FY21, going by the Revised Estimates in the Budget documents.
The collections are pegged at ₹8.7-lakh crore, up just 3 per cent over FY20. This pales when compared to the strong double-digit growth in the last few years. This is the lowest growth in the last decade, barring FY12, when collections dipped by 19% y-o-y.
At that time, investor interest had shifted to bank deposits, thanks to the 9-9.25 per cent returns offered on bank deposits then. FY12, thus, saw a robust 13.8 per cent growth in bank deposits (over FY11) at the cost of small savings schemes. Investors scouted for better rates in FY16 again, when collections in small-savings schemes jumped by a whopping 46 per cent y-o-y, the best show in the last decade. While equity markets remained lacklustre and bank depos