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Progress of National Savings

Systematic mobilization of resources from the people through investment in small savings schemes is being pursued by the National Savings Organization since its inception in 1948 (now NSI). The collections in the small savings schemes have raised from Rs. 108 crores in 1948-49 to Rs. 280274.93 crore in 2019-2020. 100% of net collections mobilized in small savings schemes in a State/UT is transferred to the concerned State/UT Govt. as investment in special securities issued by that Government.

National Small Savings Fund

All deposits under small savings schemes are credited to the 'National Small Savings Fund' (NSSF), established in the Public Account of India with effect from 1.4.1999. All withdrawals by the depositors are made out of the accumulations in this Fund. The balance in the Fund is invested in special Government securities as per norms decided from time to time by the Central Government. The liability of outstanding balances under various small savings schemes at the close of 31st March, 1999 was borne by the Central Government by treating the same as investment of NSSF in special Central Government securities. The net small savings collections (deposits minus withdrawals by the subscribers) from 1999-2000 to 2001-02 were shared by Central and State Governments through investment in special securities issued as per their respective share. However, with effect from 1st April, 2002, the entire net collections in a State / Union Territory (with legislature) are being invested in special securities issued by the concerned State / Union Territory Government. The sums received in NSSF on redemption of special securities are being reinvested in special Central Government securities. The debt servicing of Central/State Government securities is an income of the Fund while the cost of the interest paid to the subscribers and cost of management of small savings schemes are expenditure of the Fund.

The special Central Government securities issued to NSSF constitute a part of the internal debt of the Government of India. Interest as discussed by the government from time to time is payable on the special securities issued by State / UT Governments against their share of net collections.