There had a been a sharp decline in the investments into small savings like Public Provident Fund and monthly income scheme last fiscal
New Delhi: The government is expecting a net inflow of Rs1,100 crore in the current fiscal from small savings schemes like PPF and MIS which became more attractive after the Centre's decision to hike interest rates on them, reports PTI.
“The government is expecting Rs 1,100 crore inflow in the NSSF (National Small Savings Fund) in the current fiscal,” a senior Finance Ministry official told PTI.
In order to arrest outflow of investments on small savings schemes, the government had decided to increase interest rates on them by up to 0.5% from 1 April 2012.
There had a been a sharp decline in the investments into small savings like Public Provident Fund (PPF) and Monthly Income Scheme (MIS) last fiscal and it is estimated that there has been a outflow to the tune of Rs12,000 crore from the NSSF.
For the current fiscal, the government has raised the interest rate on PPF to 8.8% from 8.6%, while MIS gives a return of 8.5% as against 8.2% earlier.
Post office term deposits of one and two years earn 8.2% and 8.3% interest, respectively, an increase of 0.50% over last fiscal.
The government had in January linked the interest rates on small savings at par with other securities in the market and also raised the investment limit into PPF to Rs1 lakh from Rs70,000 earlier to attract more funds into the NSSF.
The decline in the inflow into NSSF last fiscal had necessitate the government to go for additional borrowing to the tune of Rs92,000 crore.
With the increase in the interest rates for small savings, the government expects a decent inflow into NSSF, the official said, adding that “there is no need for additional borrowing in the current fiscal.”
For the current fiscal the government has budgeted a gross borrowing of Rs5.13 lakh crore, as against Rs5.1 lakh crore last fiscal.
As per the new rates notified for current fiscal, the National Savings Certificates (NSC) having maturity of five and 10 years attract 8.6% and 8.9% interest, respectively, up 0.2% each.
The interest rate on post office savings deposit now stands at 4%.
Interest rate for three-year term deposits has been raised to 8.4% from 8%. Similarly, interest rate on five-year deposit has been raised from 8.3% to 8.5%.
The five-year recurring deposits will fetch an interest of 8.4%, against 8% at present.
The rate for senior citizens savings scheme (SCSS) has been hiked to 9.3% from 9%.
Indian investors can now buy, hold, sell or liquidate their e-Platinum units electronically through NSEL platform
National Spot Exchange Ltd (NSEL) has announced that it will launch e-Platinum on 17 April 2012 at the Bombay Stock Exchange.
According to NSEL, e-Platinum—an investment product in platinum—will be offered in demat form under the NSEL’s e-Series banner.
“Indian investors can now buy, hold, sell or liquidate their e-Platinum units electronically. They will also have the option to invest their small savings in the systematic investment plan (SIPs),” NSEL said.
The benefits of e-Platinum include: Trading in units available in 1gram, transparent and uniform pan-India pricing, extended trading hours from 10:00 am to 11:30pm.
Government's anti-tax avoidance rules, GAAR, proposal in the Budget has been the real dampener for several FIIs
New Delhi: After pouring record funds into the Indian equity market during the first three months of 2012, overseas investors seemed to be cautious so far this month and invested Rs322 crore, reports PTI.
Foreign Institutional Investors (FIIs) made a net investment of Rs322 crore in the equity market up to 13 April 2012, according to Securities and Exchange Board of India (SEBI) data.
Net inflows stood at around Rs44,000 crore during the January-March period of 2012. However, in 2011 FIIs mostly stayed away from Indian equities and pulled out over Rs2,700 crore from the capital market.
Market analysts believe the government's anti-tax avoidance rules, GAAR, proposal in the Budget has been the real dampener for several FIIs whose clients have used participatory-notes (P-notes) to invest in the Indian market.
Besides, FIIs are also concerned about micro-economic situation in the country, they added.
During the month, foreign fund houses infused Rs214 crore in the debt market, taking the collective net investments by FIIs in stocks and bonds to Rs536 crore.
FIIs, the main drivers of the markets, turned negative on equity so far this month. The stock market barometer Sensex plunged 310 points, or 1.8 per cent, in the same period. The index finished at 17,094.51 points on last trading session.
Investment by overseas investors into the Indian stock market since the beginning of 2012 has reached to Rs44,273 crore ($8.9 billion) level, out of which Rs26, 329 crore were pumped in January and Rs25,212 crore in February and the remaining Rs8,381 crore in March.
The strong FII inflows in January- March was mainly due to reversal in the Reserve Bank of India's (RBI) monetary policy stance and subsequent impact of the improved liquidity position.