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Interest Rate Cuts -Can It change mindset of indian middle class?

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krish44

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Govt has after trying to tax EPF withdrawls has now come out with a decision to cut interest rates on PPF, Kisan vikas patra, small savings deposits.

PPF rates would be 8.1% , KVP7.8% other small deposits to 7% plus.All these rates apply for next quarter from march 1st 2016

The thinking is it will aid banks to cut lending rates for economic growth.

The poor,lower middle and middle class and pensioners who are dependant on interest incomes , it is a blow.

They after adjusting for inflation would be hard pressed to make ends meet.

Already subsidies for gas etc are getting phased out.

Banks now will further slash deposit rates also in tandem with the govt.

Most middle class would be hard pressed to go for mutual funds and other risky investments .

Those who are traditionally not investment oriented , would be not comfortable going towards stock market for making a decent living.

Tamil brahmins among others have to change their mindset to survive in this new economy.

Would they feel happy doing this ?
 
BJP government is always monkeying only with middle class and senior citizens.These fellows are to be thrown out from ruling at the earliest.
 
As we grow older the risk appetite gets lower! So there is no chance of going near volatile stocks and mutual funds! We do not have an alternative..With frugal mind set our elders would tide over this!
 
It is said that PPF still remains attractive for investors even after the interest rate cut, considering the fact that it is tax-free.
 
krish44 said:
Govt has after trying to tax EPF withdrawls has now come out with a decision to cut interest rates on PPF, Kisan vikas patra, small savings deposits.

PPF rates would be 8.1% , KVP7.8% other small deposits to 7% plus.All these rates apply for next quarter from march 1st 2016

The thinking is it will aid banks to cut lending rates for economic growth.

The poor,lower middle and middle class and pensioners who are dependant on interest incomes , it is a blow.

They after adjusting for inflation would be hard pressed to make ends meet.
Click to expand...

Pensioners, I presume, are not all much affected. They are compensated in a handsome manner with periodical increase in Dearness Allowance.
By experience, I state that pensioners are getting double the amount of pension what they were getting some 6 years before!
Persons who retired without pension benefit and depend on interest from meagre savings could not cope up with inflation.
They are caught in between the BJP Government's economic policies of interest rate cut and inflation as in a situation of devil and the deep sea.
 
yesmohanji you are right about pensioners in good positions.

Many central govt undertakings had contributory PF.

So meagre pension of a thousand rupees or so for them.

Their CPF money is mostly in FDs .

They really lose out.
 
psnarasimhan said:
BJP government is always monkeying only with middle class and senior citizens.These fellows are to be thrown out from ruling at the earliest.
Click to expand...

Ji,
In BJP, Modi is a very good leader with a capacity to pull the crowd behind him. But in the area of economic governance of a country...everything is black to him; he is guided / misguided by other experts (?).

Arun Jaitley with all his "silver spoon in his mouth" ...back ground knows nothing about the tale of woes of the poor, lower middle class and middle class. AJ is considered even by Govt. employees as a misfit in the Finance Ministry.

Now, BJP is having a brutal majority and could not be thrown out in the middle.
 
yesmohan said:
Ji,
In BJP, Modi is a very good leader with a capacity to pull the crowd behind him. But in the area of economic governance of a country...everything is black to him; he is guided / misguided by other experts (?).

Arun Jaitley with all his "silver spoon in his mouth" ...back ground knows nothing about the tale of woes of the poor, lower middle class and middle class. AJ is considered even by Govt. employees as a misfit in the Finance Ministry.

Now, BJP is having a brutal majority and could not be thrown out in the middle.
Click to expand...
AJ is being guided by economists who give excellent advise related to their discipline.

What is good economic sense is a disaster if there is no sense in what is socially correct.

Many deprived sections are socially backward and are kept away from mainstream by others,

If a harsh economic order is imposed on them they would be further alienated.

The poor and lower middle class do not understand GDP numbers and budget deficits.

If any move hurts them due to economic decision of govt they are helpless.

Same is true of poor pensioners .

Many would have commuted substantial amounts for marriage or higher education of children.

These would not have planned for reduction of interest rates from 11 % to 7% in a short span.

Inflation over the years would have made their capital worthless due to depreciation.

Economic sense should be moderated by a sense of what vulnerable sections will face due to smart economic management
 
If not BJP is thrown out they can very easily throw out the present FM and replace him with a person who knows the pulse of middleclass people who are the backbone of the society.
 
hi

in many villages ..still post office investment is an option for a common man....this govt has eyes on EPF/PPF.....a lot money

monsters are there....there are super rich never bothered....middle class suffer always...
 
Mr.Krish, how do you want the TMBs to change their mindset to survive in this economy. Telling something is easy but putting it in action is difficult.
 
PSN sir

I can see your dilemma.

It is difficult to change a mindset cultivated over a lifetime .

Most have believed in savings for a lifetime in small amounts besides buying small amounts of gold as security for their women..

If they are told nonchalently that they should comes to terms with new economy with investing as the new mantra , they would be helpless and aghast.

Investing in mutual funds or share market most consider as gambling and very risky and not go near it.

yet there are hardly any alternatives.

One can start small -say 10% of money and put them into mutual funds or start a SIP -systematic investment program and raise the level upto 30% of savings in four or

five years. This can be good safeguard. This is away to protect ones money. Alternately buy some real estate , say pieces of land at value one can afford in outskirts of

any city of choice. This may appreciate over a period to give some value.
 
psnarasimhan said:
If not BJP is thrown out they can very easily throw out the present FM and replace him with a person who knows the pulse of middleclass people who are the backbone of the society.
Click to expand...

His own constituency, voters thrown AJ out by defeating him in the election. But he became FM by virtue of his closeness to RSS bigwigs and personally to Modi.
 
It is very easy for those who wander in dreamland to suggest something which is far from reality.
 
Indian economy is unlikely to pick up for another two quarters.

The interest rates for deposits are likely go down further in banks to make possible for banks to lower lending rates.

6% interest rates for deposits is not for away.

It may not be more than 1-2 % above inflation rate.

since we are in recession upto end of the year,there are difficult times ahead.

Only share market may do slightly better on global cues with foreign money coming in. There has been inflow of 1100 crores after budget before which there was

outflow of twice that amount in jan -feb on fears regarding the budget.

No way retired people can remain insulated by economic distress..

There is no risk free good returns .
 
Mr.Chandru I also want to know what is SCSS. I have invested about 3 lakhs in a bank for 400 days and those fellows are giving me only 8.5% and not 9.3%. Which bank is allowing 9.3% and for what period. Is it not uniform for all banks? Banks that are paying less must be cheating the public.
 
psnarasimhan said:
Mr.Chandru I also want to know what is SCSS. I have invested about 3 lakhs in a bank for 400 days and those fellows are giving me only 8.5% and not 9.3%. Which bank is allowing 9.3% and for what period. Is it not uniform for all banks? Banks that are paying less must be cheating the public.
Click to expand...

Nowadays banks are giving about 7.5 % with additional of0.50 % for senior citizen. Even this will come come down in few days, if RBI changes Bank rates.
9.30 interest is given by Govt. under their Small savings Scheme, which again reduced to 8.60 & wef 01/04/16.Better hurry if you want higher rate.
 
swamiinathan said:
Nowadays banks are giving about 7.5 % with additional of0.50 % for senior citizen. Even this will come come down in few days, if RBI changes Bank rates.
9.30 interest is given by Govt. under their Small savings Scheme, which again reduced to 8.60 & wef 01/04/16.Better hurry if you want higher rate.
Click to expand...
Now, only 0.25% additional int. for senior citizens over and above the normal rate.
 
Salient features of SCSS
[TABLE="width: 454"]
[TR]
[TD]eligible age		Above 60 years (55 years for those who have retired under a voluntary or a special voluntary scheme provided investment is made within 1 month of date of receipt of retirement benefits.r retired personnel of Defence Services (excluding Civilian Defence Employees) - no age limit.
Facility of premature withdrawalsAvailable after 1 year of holding but with penalty
Transferability feature Not available
Tradability Not available
Nomination FacilityAvailable
Mode of HoldingGenerally single, Joint mode is permitted but only spouses will be allowed to open accounts jointly with beneficiaries.Spouse age may be less than 60years.
[/TD]
[/TR]
[TR]
[TD][/TD]
[/TR]
[TR]
[TD][/TD]
[/TR]
[/TABLE]

Maximum permissible amount of deposit permissible 15 lakhs.

Interest rate if opened before 31.03.2016 ……….9.3% ..........In budget reduced to 8.6%

Quarterly interest will be credited to SB a/c

It is advisable to have SCSS account with Post offices as it is a Govt. scheme.
( In PSU Banks also THIS PRODUCT IS AVAILABLE;

To avoid TDS furnish Form 15 H before 15[SUP]th[/SUP] of April every year.

For further clarification better approach nearest post office / Any PSU Bank.
 
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