Thursday, February 17 2005 15:36 Hrs (IST) - World Time -

New Delhi: Government is yet to decide on revising interest rate on small savings and linking it to inflation, as recommended by a committee headed by Securities and Exchange Board of India (SEBI) Chairman G N Bajpai.

"Implementing the recommendation is an option not an obligation," Expenditure Secretary D Swarup said today (Feb 17, 2005) when asked whether Government would revise the small savings rates, now standing at 8 per cent.

The Bajpai panel is understood to have suggested a slew of measures like linking the small savings rate with inflation so as to safeguard investors against rising prices.

Earlier, the Y V Reddy panel had suggested that small savings rate be benchmarked with the weighted average yield of Government papers of same maturity.

However, the earlier National Democratic Alliance (NDA) Government could not implement the Reddy panel suggestion, as it would have led to reduction in the small savings rate.

The present United Progressive Alliance (UPA) Government is also under pressure from Left parties in retaining the small savings rates.