RAS question
Which ministry announces small savings interest rates?
Correct answer: (B) Ministry of Finance.
The Ministry of Finance announces interest rates on small savings schemes every quarter.
Explanation
Small savings interest rates are announced by the Ministry of Finance. The cited Office Memorandum is issued by the Government of India, Ministry of Finance, Department of Economic Affairs, Budget Division, and its subject is the revision of interest rates for Small Savings Schemes. It states the rates for the third quarter of FY 2025-26, from 1 October 2025 to 31 December 2025, and says they remain unchanged from the rates notified for the second quarter of FY 2025-26. That fits the exam point: these rates are notified quarter by quarter by the Finance Ministry, not by a sectoral ministry or by the RBI.
Why the other options are wrong
- (A) The Ministry of Commerce is not the issuing authority in the cited small savings interest-rate memorandum.
- (C) The Reserve Bank of India is listed among recipients in the memorandum, but the issuing authority is the Ministry of Finance.
- (D) The Ministry of Corporate Affairs has no role in the cited notification, which comes from the Ministry of Finance's Department of Economic Affairs.
Concept
This tests the governance of administered interest rates in Indian Economy. RAS often asks such questions because small savings schemes link household savings, public finance and current official notifications.