Context: The recent slashing of the interest rates on small savings by the government (rescinded later) has put a light on re-examining the approach of fixing interest rates on such instruments, which contribute to the growth and offer secure income.
Evolution of linking the Small Saving Rate to G-sec:
Impact of Pandemic on small savers: Triple whammy, effectively reducing their earnings in real terms.
Rationale behind Government decision to link small savings rates to G-sec: effectively reduce interest rates on small savings schemes.
Arguments against linking small savings rates to G-sec
Way forward