The government on Thursday decided to withdraw interest rate cut order on small savings schemes. "Interest rates of small savings schemes of GoI (government of India) shall continue to be at the rates which existed in the last quarter of 2020-2021, ie, rates that prevailed as of March of 2021. Orders issued by oversight shall be withdrawn," Union finance minister Nirmala Sitharaman wrote on Twitter.

The Centre had slashed interest rates on small savings schemes, such as post-office deposits and public provident fund, by up to 110 basis points, dealing a fresh blow to savers seeking safety. The rate of interest on the public provident fund was cut to 6.4 per cent, its lowest since 1974, from 7.1 per cent.

The steepest fall of 1.1 per cent was effected in the one-year term deposit. The new rate was brought down to 4.4 per cent as compared to 5.5 per cent. Interest rates for small savings schemes are notified on a quarterly basis.

Last month, the Reserve Bank of India (RBI) kept interest rates static for the fourth time in a row at 4 per cent on inflationary concerns

While announcing the quarterly setting of interest rates in 2016, the finance ministry had said that rates of small savings schemes would be linked to government bond yields. Last month, the Reserve Bank of India (RBI) kept interest rates static for the fourth time in a row at 4 per cent on inflationary concerns.