Sources in the finance ministry have indicated that on account of increase in net collections from small savings, the government is expected to revise its borrowing plan in the second half of the current financial year to reduce dependence on markets.

For the first quarter of the financial year 2023-24, the net collections under Small Savings Fund have seen a growth of over 48 per cent as compared to the corresponding period last year, during which the growth was around 9.9 per cent.

A finance ministry official revealed that the net collection has so far reached 34 per cent of the budgeted target. The official further commented, “This increase in net collection gives us more flexibility.”

In the Senior Citizens Savings Scheme alone, there has been a significant increase of 187 per cent from April to July 2023 as compared to the same period in 2022. The maximum investible amount in Senior Citizen Savings Scheme has been increased from Rs.15 lakh to Rs. 30 lakh in the Union Budget for 2023-24.

Apart from this, the Mahila Samman Savings Scheme has also seen considerable growth, with 15.8 lakh accounts opened till July this year and total deposits of Rs 9,611 crore.

Mahila Samman Savings Scheme is a one-time scheme, available for a period of two years. Women can apply for this scheme on or before March 31, 2025. While there is no upper limit on the number of accounts, there is a cap on the maximum deposit limit. Further, a gap of at least three months should be maintained between the opening of any two accounts.

The scheme allows deposits from a minimum of Rs 1,000 to a maximum of Rs 200,000 in multiples of Rs 100. After this limit is reached, no additional deposits are allowed. The Small Savings Scheme offers a fixed interest rate of 7.5 per cent and includes the option of partial withdrawal.

The restructuring of the borrowing plan reflects the government’s effort to take advantage of the growth in savings accumulations, thereby opening up the possibility of more flexible fiscal management.

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