27 July, 2021

Small Savings, Big Rates

The author is president, Oxus Investments. His latest book is 'Imagine There's no Country'.

Small Savings, Big Rates
Openness leads to more efficiency, greater growth, and boredom. Once the ministry of finance took the unprecedented step of openly discussing tax reform on the web, via the Kelkar report on taxes, the suspense about the budget has disappeared. But there is still a big mess to be cleared up.

This mess is the possible continuation of the biggest financial scam the world has ever known, much bigger than all the Enrons put together. It is done in the name of the poor and like all such (deliberately?) misguided attempts, it benefits precisely the people it should not. It is worth Rs 1,00,000 crore annually, or close to half of the combined deficits of the Centre and the states. Or half of the entire financial savings of the household sector! So the next time you protest about the deficit, think about RPPR, or Robbing the Poor to Pay the Rich.

RPPR is not the official name of the scheme; it is magnificently titled "Small Savings". These are deposits of the poor in "small" amounts at government banks, guaranteed by the government and as good as government paper, the kind that...

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