Yet, one of the fallouts of the low-rate regime has been the low returns for savers and those holding bank deposits. If one were to take into account even inflation based on consumer prices at 5-5.5 per cent, savers in the country are thus earning a net negative return. Savers would therefore have to be supported by some fiscal “sops” so that their real rate of return is positive. These savers contribute to the lendable resources of banks and thus contribute to economic growth by keeping money in banks. There will of course be a “fiscal giveaway”, but we owe it to the savers who fund the banks for supporting our economy through savings.

Source: The Hindu January 13, 2022 01:57 UTC