With inflation projected at over 7 percent in June 2014 there is bleak possibility of the real value of income registering a healthy increase. Growth rate has also not been satisfactory, put at around 5 per cent plus though it is a cumulative effect over a period of time. With the ascent of the Narendra Modi Government Sensex too has been hovering around 26000 points or less though the investors are on an optimistic wave.
Now in this situation what does one do to get a sizeable return on his savings? A question many ask and are stumped for answers. If you look at the stock market one will feels that its reflection on the investment in key and other stocks is not going to be any better. Mutual funds remain in the same bracket and those who have invested in it must be biting their fingers as returns are still minimal. Some mutual funds are also absorbed into other healthier schemes of a company which perform better over a period of time.
In short our savings are not able to attract much returns, or atleast give less than expected. We keep looking sometimes, unreasonably so, that in the late nineties postal savings doubled in return because of the prevalent interest rates. Now they know any investment in NSC or term deposits/PPF fetch only 70 per cent or less on the investment which leaves a jarring feeling. Interest rates have come down and but for MIS postal savings schemes have no attraction for the investor.
As a result investors turned to scheduled banks which give around 10 per cent plus for a year or a specified period of three years just to see some appreciation on the money invested. Housing is the main concern of people now and they want to shore up savings to meet the cost so that the loan quantum would fetch attendant benefits.
Everyone is forced to ask the question as to why the government could not increase the interest rates marginally on all postal savings schemes because of the millions of account holders in post offices all across the country. Forget the tall dream of seeing the amounts double in the space of six years. At least such a rise in interest rate would fetch huge turnover of investment in post offices which have already been impacted by the invasion of internet. It will ensure 80 per cent return on the investment if the tenure is also correspondingly reduced to 4 or 5 years. People will also be willing to put their money in it and maintain accounts instead of relying on banks for their monthly expenses. This is because post offices have an equal reach across the country and the huge turnover could also be used to fund rural schemes . Perhaps float bonds as well at an attractive dividend which will diversify investment.
May be, it is worthwhile to revisit the untapped potential of post offices, especially from the investment angle.