One tends to endorse the well-timed views of the State Bank of India’s (SBI’s) research report Ecowrap stating that the interest on the Senior Citizens Savings Scheme (SCSS) should be given full tax rebate as the revenue foregone by the government could only be Rs 3,092 crore, with minimal impact on the government’s fiscal deficit. Curiously enough, this report has also assessed that there are around 41 million senior citizens’ term deposits accounts (with average deposit per account being Rs 3.3 lakh) accounting for the total deposit of Rs 14 trillion across the country. In fact, Soumya Kanti Ghosh, group chief economic advisor, SBI seems to be standing with the nation’s senior citizens when he pleads that “It is imperative that the government exempts such interest income from taxes/or increase the threshold limit” as he substantiates his well-meaning arguments with statistics.
He also went on to claim that an increase in the Public Provident Fund limit by Rs 1 lakh to Rs 2.5 lakh for individual households under 80C will lead to additional savings of more than Rs 2 trillion compared to the total revenue foregone of Rs 40,000 crore, even after adding to the interest burden. It could be a win-win for the revenue-starved government of the day. Mind you, the government has reportedly asked the central public sector undertakings to declare a dividend of Rs 19,000 crore apart from seeking some hefty sums of money as interim dividend from the Reserve Bank of India (RBI), representing a part of its annual transfer of surpluses in the month of July after finalisation of its annual books of accounts (as on June 30 each year) under Section 47 of the RBI Act. It might be in addition to the transfer of a massive amount (out of the central bank’s so-called excessive capital reserve funds) as was recently identified by a specially constituted committee led by former governor Bimal Jalan, at the insistence of the government.
Kumar Gupt, Panchkula
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