Under fire, the Union Finance Ministry has rolled back the interest rate cuts on small savings schemes (SSS) and Public Provident Fund (PPF).
Finance minister Nirmala Sitharaman on Thursday said that the order was issued by oversight.
"Interest rates of small savings schemes of GoI shall continue to be at the rates which existed in the last quarter of 2020-2021, ie, rates that prevailed as of March 2021. Orders issued by oversight shall be withdrawn. @FinMinIndia @PIB_India" tweeted Nirmala Sithraman.
On Wednesday, Union Finance Ministry had announced a cut in interest rates of small savings schemes.
According to the circular by the ministry, the interest rates of small savings schemes have been reduced by 50-100 basis points for the April-June quarter of the financial year 2021-22.
The interest rate on Public Provident Fund (PPF) has been reduced by 0.7 percent to 6.4 percent while National Savings Certificate (NSC) will now earn 0.9 percent less at 5.9 percent.
The interest rate on the post office savings account has also been cut from 4 percent to 3.5 percent. The 5-year Recurring Deposit(RD) scheme will get a 5.3 percent while Sukanya Samriddhi Yojana will offer 6.9 percent per annum. The money in Kisan Vikas Patra(KVP) will now double in 138 months ( 6.2 percent) instead of earlier tenure of 124 months (6.9 percent).
For the first time, the interest rate on saving deposits has been reduced by 0.5 percent to 3.5 percent from the existing 4 percent annually.
The steepest fall of 1.1 percent has been effected in the one-year term deposit. The new rate will be 4.4 percent as compared to 5.5 percent at the moment.
Similarly, a two-year fixed deposit will earn 0.5 percent less at 5 percent, the three-year term deposit rate will be down by 0.4 percent and five- year term deposit rate will be lower by 0.9 percent at 5.8 percent.
The interest rates for small savings schemes are reviewed and notified by the finance ministry on a quarterly basis.
The finance ministry also extended the deadline for linking the Permanent Account Number (PAN) to Aadhaar by another three months."Central Government extends the last date for linking of Aadhaar number with PAN from March 31, 2021 to June 30, 2021, in view of the difficulties arising out of the COVID-19 pandemic," the Income Tax department tweeted.