A costly short-term borrowing: Dip into small savings -Sunny Verma

-The Indian Express

The NSSF collects funds through small savings schemes, such as Post Office Savings Account, National Savings Time Deposits, National Savings Recurring Deposits, National Savings Monthly Income Scheme. It is a costlier form of borrowing for the government as compared to market loans.

New Delhi: AN INCREASED reliance on the National Small Savings Fund (NSSF) and issue of recapitalisation bonds has helped the government to improve its fiscal affairs but its headline deficit number does not fully reflect the underlying pressures from a delayed fiscal consolidation plan.

The Centre is on course to raise Rs 2.35 lakh crore through these two means: an estimated Rs 1.25 lakh crore from the NSSF and Rs 1,10,500 crore via recapitalisation bonds. The NSSF share in financing of fiscal deficit is projected to rise to 18.5 per cent in 2019-20, up from 12 per cent in 2018-19, according to last week’s Budget documents.

The NSSF collects funds through small savings schemes, such as Post Office Savings Account, National Savings Time Deposits, National Savings Recurring Deposits, National Savings Monthly Income Scheme. It is a costlier form of borrowing for the government as compared to market loans.

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The Indian Express, 8 February, 2019, https://indianexpress.com/article/business/meanwhile-a-costly-short-term-borrowing-dip-into-small-savings-5574724/

 

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