KARACHI, June 12: The federal budget announced on Saturday spells out no relief or incentives for investors in National Savings Schemes (NSS). Omar Ayub Khan, Minister of State for Finance, who presented the budget, told Dawn on Tuesday that the government had to “tap the cheapest source of borrowing, to tide over the deficit”.

He said the government was aware of hardships of that class of savers and had proposed measures to mitigate the pensioners’ sufferings.

He admitted that the previous year’s (2006-07) budget had allowed an increase in the rate of profit on NSS, but said that it was a ‘one-off case’ as such measures were not usually proposed in the budget. He said he did not know if the profit rates would be revised upwards any time soon because he was not a member of the fiscal and monetary policy board.

A fixed-income analyst observed that the reason that the rates had not been revised could be just what the minister said. “Money is available to the government at cheaper rates on treasury bills and Pakistan Investment Bonds, which is why it is not inclined to increase domestic borrowings from banks and NSS,” he said.

But if the federal budget announced on Saturday was ‘populist’ to attract voters for elections, the government clearly thought that people saving in NSS were a ‘spent force’. An senior citizen or a widow with six mouths to feed in the family would be worthless for the government, for neither could be expected to be able to trot to the polling booth.

For that or other reasons, the government appeared to ignore the miseries of the ‘voiceless’ souls, whose livelihood depended solely on monthly income earned from the Bahbood Certificates or the monthly income certificates. And what does the NSS currently offer? The Regular Income Certificates pays profit at 9.24 per cent on an investment of Rs100,000, with a minimum limit of investment fixed at Rs50,000.