Interest rate cut on savings: Cong accuses government of fleecing the poor

New Delhi; Congress tonight reacted sharply to government's move of slashing interest rates on all small savings schemes, including PPF, saying it is "fleecing" the poor and is a "criminal breach" of trust of hapless people.

Congress said it is "flabbergasted" by government's attitude which allows wilful defaulters of public money to escape and launches "fair and lovely" scheme to encourage tax evaders.

"The Narendra Modi government seems hell bent on fleecing the ordinary poor, middle and lower-middle class. It is a criminal breach of trust with hapless people who put their money in the custody of the government of India with the belief that they will not be cheated," Congress chief spokesman Randeep Surjewala said.

He said the decision to slash interests rates on small savings schemes PPF and KVP, which contains small and lifetime savings and investments of salaried employees of non-government sector, marginal farmers and street vendors, was nothing but an "overt attempt at robbing money by snatching it from unsuspecting individuals".

He said Modi and Finance Minister Arun Jaitley, along with their cohorts in Sangh Parivar, have developed a "deceitful and devious" modus operandi of first creating an atmosphere where the public discourse gets consumed by and involved in some "inane controversy" and then introduces these anti-people policies while public and media attention is away.

"One is flabbergasted by this attitude of this government, which entails letting wilful defaulters of public money escape, encourages tax evaders by launching 'fair and lovely' schemes and benefits from cutting into savings of ordinary middle and lower middle class people," he said.

In a move that will hit common man, the government today slashed interest rates on all small savings schemes, including PPF, Kisan Vikas Patra (KVP) and senior citizen deposits, to make them more market aligned.

Interest rate on Public Provident Fund (PPF) scheme has been cut to 8.1 percent for the period April 1 to June 30, from 8.7 percent, at present.

Surjewala said the KVP involves savings as small as Rs 1,000 for a period of 100 months and the PPF involves savings as less as Rs 500 annually.

As the amounts themselves demonstrate, both these schemes cater to the most economically vulnerable sections apart from the wage-earning and salaried people.

"The government has cheated them blatantly - it has broken the trust of 3.7 crore PPF account holders and crores of KVP holders.

"After rolling back, under pressure from Congress, its plan to tax EPF, the government has played this diabolical game of fleecing away from people's PPF accounts and KVP savings," he said.