No hike in small savings rate, LS witnesses clash of titans

New Delhi, May 7 (UNI) Refusing to yield to the pressure of the Left to increase interest on small savings schemes, Finance Minister P Chidambaram, however, today maintained in the Lok Sabha that these schemes were not ''withering away.'' He argued that the interest of the depositors would be fully safeguarded.

Replying to a Calling Attention motion moved in the Lok Sabha by CPI veteran Gurudas Dasgupta, Mr Chidambaram said there was no evidence of any net outflow of deposits from the Small Savings Schemes to prove his point that Post Office Savings Schemes were not meeting death.

The Finance Minister refuted charges by Mr Dasgupta that the government was conspiring to kill these schemes by not hiking interest rates on Post Office Savings Schemes, thus pushing household savings into speculative activities, like the stock markets.

The Left leader argued that the stickiness of these interest rates had resulted in shifting of resources from small saving schemes to Commercial Banks, mutual funds and the like.

"I cannot direct the depositors to put their money only in small saving schemes in Post Office, when the number of savings instruments in the market today are manifold", Mr Chidambaram said.

The debate on small savings saw a literal clash of titans with charges being hurled at the Finance Minister by Mr Dasgupta and Mr Chidambaram using his tact, legal skills and oratory to repeatedly state that he would not get provoked under any circumstances.

In a sharp attack, Mr Dasgupta held Mr Chidambaram for being solely responsible for the recent electoral defeats of the ruling Congress party by stubornly pursuing anti-peoples policies and his inability to contain inflation.

Mr Chidambaram said net collections-- gross collections minus withdrawals, which includes redemptions on maturity in each financial year-- of small saving instruments were up by four per cent during the last financial year.

At this point, Mr Dasgupta xxxx Eds picking up from para seven, line one of Par 24 ''Small Savings-Chidambram-LS.

UNI