High interest rates on bank deposits have shooed investors away from government’s small saving schemes, which have seen a sharp decline of 21 per cent during 2006-07, Assocham Eco Pulse Study said on Monday.
The study on ‘Growth Trend of Small Savings Schemes’ revealed that collections under different small saving schemes run by state and central governments registered a drop in 2006-07 as compared to compound annual growth rate (CAGR) of 13 per cent during 6 year-period from 2000-01 to 05-06. However, saving deposits with banks increased by 14 pc maintaining CAGR of 19 per cent.

Total receipts under the small savings schemes during 2006-07 were worth Rs 1,37,560 crore as compared to Rs 1,73,283 crore in the previous year. The amount outstanding in these schemes was Rs 5,59,932 crore. While total deposits with commercial banks were at Rs 6,55,274 crore at the end of FY07, as commercial banks raised deposit rates by 200 basis points with the RBI tightening the money flow in the market.

Statistics
Kisan Vikas Patra recorded a decline of 26 per cent during 2006-07, as compared to 25 per cent rise in previous year. Amount of Rs 15,3636 crore is outstanding in Kisan Vikas Patra Scheme, which is around 27 per cent of the total small savings.

The receipts of Post Office Recurring Deposits grew by one per cent as compared to previous year’s growth rate of 18 per cent. The amount outstanding at the end of fiscal ’07 was Rs 59,279 crore. The report revealed that Public Provident Fund, 3 per cent of total small savings, registered a decline of 18 pc in receipts during FY07. The scheme was growing at a CAGR of 13.6 per cent.