Context:- Recently government issues a notification to reduce the saving rate and now government has taken it back.
Why such move:- Indian economy is the high interest rate economy due to high saving rates.
- previously economic survey also gave suggestions about low interest rate.
- Low saving interest rate means, low interest rate for business.
- Low saving rate will boost the demand because people will spend more.
- It will also encourage the investment in the other areas such as real state, share markets etc.
- Low saving rate will discourage the small saving rate.
- People will not have security in deposits.