New Delhi, Nov 18: Finance Minister Arun Jaitley re-launched the ‘Kisan Vikas Patra’ scheme along with Communication and IT Minister Ravi Shankar Prasad here on Tuesday to encourage the habit of small savings among citizens.
The re-launched KVP will be available to the investors in the denomination of Rs. 1,000; 5,000; 10,000 and 50,000 with no upper ceiling on investment. The investment made in the certificate will double in 100 months.
The scheme, which will provide facility of unlimited investment by way of purchase of certificate from the post offices in various denominations, will soon be made available across the country through designated branches of nationalized banks.
Finance Minister Arun Jaitley said: “When the economy was in good shape, Indian’s domestic saving stood at 36 percent. But in the last few years, the rate of saving has gone down to 30 percent.”
Jaitley said that increasing saving rates in the economy and need to encourage the people for saving are the Centre’s priorities.
The certificates can be issued in single or joint names and can be transferred from one person to any other person.
The facility of transfer from one post office to another anywhere in India and of nomination will also be available under the scheme.
The certificate can also be pledged as security to avail loans from the banks and in other case where security is required to be deposited.
Kisan Vikas Patras have unique liquidity feature, where an investor can, if he so desires, encash his certificates after the lock-in period of 2 years and 6 months and thereafter in any block of six months on pre-determined maturity value.
With a maturity period of 8 years 4 months, the collections under the scheme will be available with the Govt. for a fairly long period to be utilized in financing developmental plans of the Centre and State Governments and will also help in enhancing domestic household financial savings in the country.
Kisan Vikas Patra (KVP) – a certificate savings scheme was launched by the government on 1st April, 1988. The scheme provided facility of unlimited investment by way of purchase of certificates from post offices in various denominations.
The maturity period of the scheme when launched was 5½ years and the money invested doubled on maturity. The scheme was very popular among the investors and the percentage share of gross collections secured in KVP was in the range of 9% to 29% against the total collections received under all National Savings Schemes in the country.
Gross collections under the scheme in the year 2010-11 were Rs. 21631.16 crores which was 9% of the total gross collections during the year. In the year of its closure, the scheme secured gross collections of Rs.7575.95 crores (April 2011 to November 2011).
(With Agency Inputs)