Pullout from Post schemes hits State

Deccan Chronicle Hyderabad Nov 23 : The real estate and share market boom has hit postal saving schemes badly in Andra Pradesh. in the last six months depositors with drew over Rs. 4500 crore from postal schemes and invested it in shares ,mutual funds and real estate.

Most of them felt that postal schemes which offer only nine percent interest annually were not attractive enough. The huge withdrawals will have an effect on State finances.The centre allows states to utilize 75 per cent of the postal savings under plan assistance. Last year,the state got Rs 3,447 crore out of the net deposit of Rs.4,596 crores (gross deposits amounted to Rs 10,171 crore)

Depositors withdrew the 4,596 crore and another Rs.198 crore deposited this year .The target for postal savings schemes for this year has been reduced to Rs.8,000 crore. The Govt.expects to get smaller deposits this year.
The Govt. is worried about this and has decided to ask the centre to make postal savings more attractive to retain investors. "We will raise the issue in the National Development council meeting to be held on December 9." said finance Minister K.Rosaiah .the minister is a member of the sub committee appointed by the centre to study small savings schemes.

"We will convince the Centre to extend income tax exemption to postal savings schemes so that people will come back to invest in them." Mr Rosaiah said.The Postal and small savings departments have not faced such crisis in the last three decades. In fact most of the depositors used to invest their funds.
: Nowadays people also prefer to invest in gold since it yields 30 percent returns within a year ," said Mr C.Kutumba Rao,Chief financial analyst of Prime India securities.