A Comment on Small savings rate cut and relating it with inflation

My Comment on an article " Small savings rate cut: Who gains, who loses" published in the economictimes.com Dated 29/03/2016 at 3:30 pm.


"I wonder how do you say the inflation rate has fallen in recent periods, whereas the most essential commodities like rice and pulses are skyrocketing. 

The basic food we eat in India is rice which is at Rs.50 per kg. or even more. The toor dal is at Rs. 240 per kg. Other essential items which are required for good nutrition are also very high priced. 

So, how is it possible that inflation can be low? Isn't it like baffling the public by showing a mirage and telling them "there it is the water pond; go and quench your thirst"".

Small savings rate cut table for the Quarter April- June,2016

The below interest rates table on small savings (applicable for the Quarter April to June, 2016) is copied from the article "How to make best out of small savings rate cuts" published in the economictimes.com Dated 21/03/2016 for the benefit of public.                          

A Comment on arguments placed by supporters of small savings rate cuts

MY Comment on an article "How to make best out of small savings rate cuts" published in the economictimes.com Dated 21/03/2016 at 12 noon. 


"The author seems recommending investors to rush to Banks and Post offices before 31st March of this month to invest in Senior citizenship schemes, NSCs, KVPs and other term deposits to receive the existing higher rates. This is what he thinks making the best out of small savings rate cuts!

His argument regarding PPF rate that "it will be good when compared to inflation rate" is not a rational argument. 

He means that the investor in PPF is still better as he earns a nominal margin of 7.25 PPF interest - 5.18 inflation rate = 2.07% extra. It is not sufficient for meeting the expenses of the retired people which cannot be predicted as you don't know what need arises when.

Further many expenses are not related to the inflation rate or CPI rate. Hospitalisation expenses, higher education expenses for his children, etc. are governed by other factors which are spiralling already."