After keeping small savings rates unchanged for nine consecutive quarters, the Finance Ministry Thursday hiked interest rates on some of the small savings schemes for October-December. Interest rates were marginally hiked for 2-year and 3-year time deposits, senior citizens savings scheme and Kisan Vikas Patra, while rates for other schemes remained unchanged.

The changes have come amid higher inflation rate and a rising interest rate cycle. The recent retail inflation print for August came in at 7 per cent, marking the eighth month above the upper threshold of the RBI’s target of 4 +/- 2 per cent, and almost three years (35 months) of staying above 4 per cent. The repo rate currently stands at 5.4 per cent, after a raise of 140 basis points since May. The view within the ministry for hiking rates is to “balance the interests of senior citizens, persons saving in instruments without tax benefits along with keeping the interest rate for small savings in check”, which essentially translates into a higher interest cost for the government when it borrows against the National Small Saving Fund. Interest rates on small saving schemes are reset on a quarterly basis, in line with the movement in benchmark government bonds of similar maturity.

Typically, small saving rates are linked to yields on benchmark government bonds but despite the movement in G-sec yields, the government had not reduced the interest rates over the last two years.

SC quizzes Centre over delay in framing data privacy law

The Supreme Court on Thursday, September 29,  questioned the Centre over its delay in framing a law to protect the data privacy of its citizens despite right to privacy being declared a fundamental right by the top court in 2017. The Centre, however, claimed that the new law would be introduced in the coming winter session of Parliament. The issue came up before a five-judge Constitution bench, headed by Justice KM Joseph, which was discussing WhatsApp’s 2016 privacy policy that allowed the sharing of user data with Facebook and its other group companies for the purposes of advertising and marketing. This policy was challenged by two law students, Karmanya Singh Sareen and Shreya Sethi, as being violative of their fundamental right to privacy. Solicitor General Tushar Mehta, appearing for the Centre, told the court that the concerns of the petitioners would be met by the law to be brought by government, saying that the Personal Data Privacy Bill was tabled in Parliament in 2019, scrutinized by a joint committee of Parliament, and later withdrawn in August this year to make way for a more comprehensive law based on suggestions and amendments proposed by the House panel.