[op-ed snap] Making life easier for small savers: Savings Promotion Act


Mains Paper 2: Governance | Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

From UPSC perspectives, the following things are important

Prelims Level: The SSS scheme, the PPF act, the Savings Bank acg of 1873, etc.

Mains Level: Particulars of the proposed Savings Promotion Act.



  1. The Union Cabinet has recently decided to bring a law to make life easier for small savers, especially those who save for girl children and senior citizens
  2. and to “further strengthen the objective of ‘minimum government, maximum governance’

Government has proposed the Savings Promotion Act

  1. Government has proposed the merging of the Public Provident Fund (PPF) Act of 1968, the Government Savings Banks Act of 1873 and the Government Savings Certificates Act of 1959
  2. There is no proposal to take away existing benefits to depositors through this merger
  3. The main objective is to make implementation easier for the depositors through this Act

New benefits for depositors
Provisions for premature closing of the SSS

  1. The PPF Act states that an account cannot be closed before completion of five financial years
  2. The proposed Act seeks to make premature closure of an account easier by introducing provisions through a specific scheme notification
  3. The benefits of premature closure of Small Savings Schemes (SSS) may now be introduced to deal with medical emergencies, higher education needs, and so on

Provisions for minors

  1. Now, investment in SSS can be made by a guardian on behalf of minor(s)
  2. Under the provisions in the proposed Act, the guardian may also be given associated rights and responsibilities
  3. There was no clear provision earlier regarding deposits by minors in the existing Acts
  4. And if the minor dies and there is no nomination, the balance amount shall be paid to the guardian

Other provisions of the proposed law

  1. The Bill also has clear provisions on the operation of accounts in the name of physically infirm and differently abled persons
  2. As per the existing Acts, if a depositor dies and nomination exists, the outstanding balances will be paid to the nominee
  3. The proposed law has clearly defined the right of nominees


Small Savings Schemes (SSS)

  1. The Central Government operates Small Savings Schemes (SSS) through the nationwide network of about 1.5 lakh post offices, more than 8,000 branches of the Public-Sector Banks and select private sector banks and more than 5 lakh small savings agents
  2. The Small Savings Schemes can be grouped under three:
    (i) Post office Deposits: Post Office Savings Account, Post Office Time Deposits (1,2,3 and 5 years), Post Office Recurring Deposits, Post Office Monthly Account,
    (ii) Savings Certificates: National Savings Certificate (VIII Issue) and Kisan Vikas Patra
    (iii) Social Security Schemes: Public Provident Fund, Senior Citizens Savings Scheme, and Sukanya Samriddhi Account
  • Subscribe

    Do not miss important study material