Relaunched Kisan Vikas Patra promises to double money in 100 months
Moneylife Digital Team 18 November 2014

Finance minister Jaitley said, Kisan Vikas Patra would help poor gullible investors to channelise their savings towards trusted government scheme instead of some ponzi schemes, where hard earned savings disappears

 

With the objective to raise small savings in the country, the Indian government on Tuesday re-launched Kisan Vikas Patra (KVP), an instrument which will provide trusted option of investment to poor and keep them off ponzi schemes. Available in the denomination of Rs1,000, Rs5,000, Rs10,000 and Rs50,000, the amount invested in KVP would be doubled in 100 months. KVP, that has got no upper ceiling for investment, can be encashed after a lock-in period of 30 months. However, savers would not get any tax benefit for their investment in KVP.

 

"In the last two-three years, savings rate in country has declined from a record high of 36.8% to below 30% due to slowdown in the economy. It is, therefore, necessary to encourage people to save more," Finance Minister Arun Jaitley said during the launch of the revamped KVP.

 

KVP would serve two purposes, he said, adding, one it would help poor gullible investors to channelise their savings towards trusted government scheme instead of some ponzi schemes, where hard earned savings disappears.

 

"Secondly, there is an urgent need to raise savings in the country...These savings are then used for nation building. Such saving instruments not only earn interest but help in development of the country," he said.

 

Talking about the features of the instrument, the Finance Minister said this simple product would be a bearer instrument without name of the holder in the first phase.

 

The Finance Ministry has said that there will not be requirement of Permanent Account Number or PAN in putting money in launched Kisan Vikas Patra. There will also not be any upper limit on investment.

 

The Finance Minister Arun Jaitley and Communication Minister Ravi Shankar Prasad relaunched KVP on Tuesday. The scheme aims to boost saving and use them for long term capital requirement. "This will be a bearer instrument just like currency and easy to encash," he said.

 

Initially, the certificates will be sold through post offices, but the same will soon be made available to the investing public through designated branches of nationalised banks, Jaitley said.

Comments
Adi Daruwalla
8 years ago
Doubling to take place every 8.33 years, in KVP. Thats too long. NSC was giving 1 and half times of capital in 6.5 years. if doubling happens in 7 years then the rate of return is good.
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