Dear reader, online ads enable us to deliver the journalism you value. Please support us by taking a moment to turn off Adblock on Dawn.com.

Return on NSS

IT is heartening to learn that the government has increased the profit rates of National Saving Schemes (NSS), effective from July 1. However, keeping in view the prevailing economic situation this increase seems to be insufficient.

The deposits placed by the people in various schemes of the National Savings Centres form ‘unfunded debt’ which is the third major component of the government’s domestic debt – the other two being permanent and floating debts.

These public savings invested with National Savings are genuine savings where the savers abstain from consumption for the duration that the sums are invested.

They are non-inflationary as the National Savings do not create artificial deposits from it through the process of lending as resorted to by the commercial banks through the fractional reserve banking system.

The reasonable return on the NSS would inculcate the habit of saving among the public which is a prerequisite for the development and economic growth of a country.

The benchmark of national saving is said to be 33 per cent of people’s income. However, in our case saving by the people is around 13 per cent which can be increased by guaranteeing a better return on their savings.

S. SAJJAD Q. ASHRAF Haripur

DAWN_VIDEO - /1029551/DAWN-RM-1x1

Most Popular

LARGE_RECTANGLE_BOTTOM - /1029551/Dawn_ASA_Unit_670x280


Comments (0) Closed