Increase in the collections under the senior citizens scheme comes after the government increased the deposit limit to Rs 30 lakh from Rs 15 lakh in FY24.
The government's borrowing pressure can ease in the coming months as collections in senior citizen savings scheme cross Rs 1 lakh crore in the current fiscal. As per the data, reported by Economic Times, collections in senior citizens savings scheme recorded an over two-fold increase till September 23 compared to the same period last year.
A senior government official told the paper that the collections stood at around Rs 40,000 crore in the same period in FY23. The official added that the new small savings fund for women is also off to great start, with collections of over Rs 13,500 crore till Sept 23.
As per the government's plan to finance its fiscal deficit, Rs 4.71 lakh crore will be used from the National Small Savings Fund (NSSF). Fiscal deficit is expected to be at Rs 17.87 lakh crore.
Robust collections under the scheme can ease the pressure of the government to borrow from the markets, where the costs have been rising in October. Yields on 10-year government securities rose to a seven-month high of 7.331 per cent recently.
The increase in the collections under the senior citizens scheme comes after the government increased the deposit limit to Rs 30 lakh from Rs 15 lakh in FY24. The interest rate under the scheme had also increased to 8.2 per cent from 8 per cent in March quarter.
With the government focused on fiscal consolidation, robust collections under the scheme can help the government to keep the fiscal deficit in check. In the next two years, the government plans to cut fiscal deficit by 1.5 per cent.