The government is paying over Rs 2,000 crore annually as commission to agents of the small savings schemes, adding to the schemes' overall cost, says an official report.
According to the report of Shyamala Gopinath committee on Small Savings, the revised estimate of such commission was at Rs 2,400 crore in 2010-11. For this fiscal, it is expected at Rs 2,200 crore, the committee said quoting the Budget estimates.
There are over five lakh small agents in the country. The committee on Comprehensive Review of National Small Savings Fund, headed by Reserve Bank Deputy Governor Shyamala Gopinath and which submitted its report earlier this week, has recommended sharp reduction on commissions for agents of post office schemes.
The committee noted that small savings schemes are agent -driven and suggested that the commission on them should be gradually reduced from four per cent to one per cent.
There has been a steady rise in total commission paid to agents over the last few years; for 2005-06, it was at Rs 1,972 crore. The figure went up to Rs 1,983 crore and Rs 2,048 crore in 2006-07 and 2007-08, respectively.
However, there was a fall in the numbers to Rs 1,430 crore in 2008-09, which coincided with the global economic recession.
However, the next year, it jumped to Rs 2,180 crore, and Rs 2,400 in year 2010-11.
Small savings collections are mobilised through a wide network of agents. Basically, three type of agencies — Standardised Agency System (SAS), Mahila Pradhan Kshetria Bachat Yojana (MPKBY) and Public Provident Fund Agents (PPFA) — are in the market.
These agents are remunerated from the National Small Savings Fund ( NSSF) on the basis of gross small savings collections.
Under the SAS — which covers Kisan Vikas Patra, Post Office Monthly Income Scheme, Post Office Time Deposits, National Savings Certificates, National Savings Scheme and Senior Citizens Savings Scheme — the commission given by the central government is 0.5 per cent or one per cent of the collection.
In the case with PPFA, which covers the Public Provident Fund (PPF) the commission is also one per cent.
It is the highest for agents of the MPKBY who operate the Post Office Recurring Deposits Scheme. Such agents earn 4 per cent commission.
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