Small savers across regions show a surprising swing

Small savers in different regions show strong preferences for a particular kind of savings scheme. Although the same set of investment instruments are being offered by more than 1.56 lakh post offices spread throughout the country, an official analysis has revealed that while people in West Bengal invest bulk of their surplus funds in the monthly income scheme (MIS), Delhiites have shown strong preference for the Public Provident Fund (PPF).

Small savers are investing bulk of their savings in the Kisan Vikas Parta (KVP) — an instrument which offers better return than other schemes, but no tax relief. Under KVP scheme, the money invested doubles in eight years and seven months. The interest rates were last lowered on March 1, 2003. Unlike other savings schemes, there is no limit on investment in KVP and one can invest in denominations from Rs 100 to Rs 50,000.

The total outstanding balance towards KVP at the end of March 31, 2004 was Rs 1,22,191 crore. The UP circle was on top with a total outstanding of Rs 22,792 crore followed by WB at Rs 19,426 crore and Gujarat at Rs 12,272 crore. Bihar was ahead of states like Maharashtra and AP as far as investments in KVP was concerned. KVP also remained a popular investment instrument in Punjab and Haryana.