Must move to lower interest rates: Finance Minister

Speaking at the BJP national executive meet here, he said interest rates on small saving schemes were “formula based” and the government uses its resources to give subsidy on these schemes, above the rates determined by the market. 

Rejecting the criticism of Congress Vice President Rahul Gandhi for reducing interest rates on PPF and senior citizen saving schemes among others, Jaitley said the UPA government also went by the same formula but the rates were high during its time due to a sluggish economy. 

“The formula has been there for long, we did not make it. The market determines the interest rate and government gives subsidy on its securities, including saving schemes, above it. We give it in PPF, we give a little more on senior citizen schemes. 

It’s formula driven, it’s linked to the market. “To make the economy more efficient, we have to move towards lower interest rates in both lending and deposit rates,” the Finance Minister said.