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Government sets up panel to review small saving funds

New Delhi, July 13 (IANS) The government has set up a committee to review the structure and functioning of the National Small Savings Fund (NSSF), including deregulating interest rates on small savings instruments, the finance ministry said Tuesday.

Headed by Reserve Bank of India Deputy Governor Shyamala Gopinath, the panel has been set up as per the recommendation of the 13th Finance Commission which had said a comprehensive review of NSSF was necessary to bring in transparency, market-linked rates and other reforms to the scheme.

‘While making its recommendations, the Committee is expected to consider the importance of small savings within the overall savings in the economy, especially its contribution in promoting savings amongst small investors and need of NSSF to be a viable fund,’ the ministry said in a release.

The panel has been also asked to review the existing terms of loans extended by the NSSF to the centre and states.

The Finance Commission has suggested debt relief to states by re-setting loans to them at a common interest rate of 9 percent in place of the current 10.5 percent and 9.5 percent.

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