The once popular postal saving schemes seem to be losing out to other investment instruments prompting the Finance Minister to extend income-tax benefits to some more of these schemes as part of the Budget proposals. Almost all the various schemes offered by the postal department have seen decline in collection over the past two years.
For instance, the deposits in the National Savings Scheme have fallen from Rs 571 crore in 2004-05 to Rs 317 crore in 2006-07. The Senior Citizens Savings Scheme is down from Rs 8,818 crore to Rs 7,238 crore during the corresponding period.
The department has, however, seen the biggest erosion of deposits from its Monthly Income schemes which have decreased by almost 50 per cent from Rs 48,691 crore in 2004-05 to Rs 20,812 crore. Only the Public Provident Fund scheme has seen a rise in collection from Rs 3,112 crore to Rs 3,797 crore. Even the Kisan Vikas Patra has seen a decline by Rs 5,781 crore.
Government officials said that a number of steps have been taken to popularise these schemes in the light of competition from the private financial sector, including a media campaign and providing training to agencies involved in mobilising collection in Small Savings Schemes.
The Department of Post has also increased the maximum deposit ceiling of Rs 3 lakh and Rs 6 lakh under the monthly income account to Rs 4.5 lakh and Rs 9 lakh for single and joint account, respectively.
The restriction on opening of more than one account in a month under the Senior Citizens Savings Scheme has been removed.
Bonus at the rate of 5 per cent on the deposits made under the post office monthly income account scheme has been reintroduced.