The Hindu Editorial Analysis : 24th October 2023

The Hindu Editorial Analysis

The Importance of Reading The Hindu Editorial: Reading The Hindu newspaper has several benefits, including improving reading skills, facilitating comprehension, staying informed of current events, enhancing essay writing, and more. For individuals aiming for a career in banking, reading editorials is crucial for vocabulary building. In this article, we will examine today’s editorials, provide practice questions, and highlight important vocabulary words.

Market borrowings.

• The Mahila Samman Savings Scheme is a one-time scheme that allows women to invest upto Rs 2 Lakh at 7.5%.
• The Senior Citizen Savings Scheme and Mahila Samman Savings Certificate, along with the Sukanya Samriddhi Yojana, which focused on the girl child, have been identified as priority small savings instruments and, along with PPE, have helped the Centre create a cushion due to the rise in inflows, so far this year.
• Given the current trend in expenditure and revenue, and small savings, the government has the option to lower its open market borrowings, which it has chosen not to do so far, sources said.
• It has instead chosen to calibrate interest rates on various schemes, factoring in the tax benefits that the government offers.
• For instance, investments into PPF, are part of the Rs 1.5 lakh annual deduction that is allowed under section 80C of the income tax.
• Besides, interest earned on the corpus is exempted from tax.
• As a result, for someone in the 30% tax bracket, the return on PPF, which currently fetches 7.1%, works out too close to 9.3%.
• The interest rates on small savings are linked to market rates and are adjusted every quarter, usually aligned with what banks offer on fixed deposits.
• Over the last few quarters, rates on schemes such as PPF have been left.
• When the Reserve Bank of India has raised the repo rate the rate at which it lends money to banks-by 2.5 percentage points since May 2022, PPF has not seen an increase.
• In contrast, two-and three-year time deposits with post offices have seen interest rates increase by 1.5 percentage point.
• According to the formula for fixing small savings rates, PPF depositors are getting 40 basis points (100 basis points equal a percentage point) less, which the shortfall in case of recurring deposits is to the tune of 20 basis points.
• At the other end of the spectrum, Kisan Vikas Patras, are fetching 24 basis points higher than the 7.26% that they should earn based on the formula linked to the yield on a government security with a similar maturity.

Practice Questions:

• Over the last few quarters, rates on schemes such as PPF have been left.Explain
• Explain the advantages of this scheme related to women.

Important Vocabs:

• Bulwark– a defensive wall
• Robust– strong and healthy
• Silver lining– something good that can be found in a bad situation
• Despite– without being affected by the thing mentioned
• Fiscal– connected with government or public money

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