Latest news with #UnionFinanceMinistry
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Business Standard
2 days ago
- Business
- Business Standard
Small savings rates unchanged for sixth straight quarter from July 1
The Union Finance Ministry on Monday left interest rates unchanged for various small savings schemes — including the Public Provident Fund (PPF), National Savings Certificate (NSC), and other government-backed savings instruments — for the sixth consecutive quarter, beginning 1 July 2025. "The rates of interest on various small savings schemes for the second quarter of FY26, starting from 1 July 2025 and ending on 30 September 2025, shall remain unchanged from those notified for the first quarter (1 April to 30 June 2025)," the Finance Ministry said in a notification. According to the notification, deposits under the Sukanya Samriddhi scheme will continue to fetch an interest rate of 8.2 per cent, while the rate on three-year term deposits remains at 7.1 per cent. Interest rates for the popular PPF and post office savings deposit schemes are also unchanged at 7.1 per cent and 4 per cent, respectively. The Kisan Vikas Patra (KVP) will continue to offer 7.5 per cent interest, with a maturity period of 115 months. The NSC will retain its 7.7 per cent interest rate for the July–September 2025 quarter. Similarly, the monthly income scheme will offer a return of 7.4 per cent, as in the previous quarter. With this decision, the interest rates on small savings schemes — largely operated through post offices and designated banks — have remained unchanged for six straight quarters. The last revision occurred in the fourth quarter of FY24, when the government had adjusted rates on select schemes. Earlier this month, the Reserve Bank of India's Monetary Policy Committee (MPC) surprised markets by cutting the repo rate by 50 basis points to 5.5 per cent, ahead of expectations of a 25-bps cut. The front-loaded rate reduction is aimed at expediting transmission to both lending and deposit rates.
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Business Standard
3 days ago
- Business
- Business Standard
Finance Ministry urges PSBs to expand branches amid private sector growth
Amid rising competition from private and small finance banks, PSBs have been asked to scale up physical infrastructure and cover over 200 unbanked population clusters New Delhi The Union Finance Ministry has directed public sector banks (PSBs) to identify potential areas and expand their branch networks amid intensifying competition from private banks, according to a senior government official who spoke on condition of anonymity. 'Banks have been asked to compete with the aggressive branch expansion by private sector banks and Small Finance Banks. PSBs need to scout for potential areas and open new branches,' the official said. During FY 2024–25 (till 31 December 2024), PSBs opened 1,391 new branches—271 in metropolitan areas, 311 in urban, 539 in semi-urban, and 270 in rural regions. In comparison, private sector banks led the expansion with 1,552 new branches: 545 in metropolitan, 466 in urban, 318 in semi-urban, and 223 in rural locations. Digital progress noted, but physical expansion emphasised The finance ministry has acknowledged the progress made by PSBs in enhancing digital capabilities. However, officials have made it clear that this must not come at the cost of physical presence. 'A strong physical presence helps build personal connections with customers, enhances service delivery, and plays a crucial role in mobilising deposits,' the official said. Earlier this month, Union Finance Minister Nirmala Sitharaman said India's financial future would be 'phygital'—a blend of physical and digital services. 'It is important to leverage the reach of technology as well as maintain physical presence to serve customers better and build trust over time,' Sitharaman said at the Digital Payments Awards 2025 in New Delhi. Private banks dominate branch expansion in FY25 Major private banks continued their aggressive branch rollout in FY 2024–25. HDFC Bank led with 421 new branches—137 in metropolitan areas, 168 in urban, 98 in semi-urban, and 18 in rural. ICICI Bank followed with 249 branches (83 metropolitan, 91 urban, 36 semi-urban, and 39 rural). Axis Bank added 337 branches, including a notable 107 in rural areas. Kotak Mahindra Bank opened 72 branches, primarily in urban and semi-urban zones, while Mahindra Bank added 13. Other private banks contributed 460 branches. Focus on financial inclusion in North Eastern region The finance ministry has also asked PSBs to expand banking infrastructure in the North Eastern region, where population density is lower but financial inclusion remains a priority. 'Two hundred and fifteen clusters with populations exceeding 3,000 and no bank branches have been identified,' the official said. In Phase 1, branches will be opened in 51 clusters with populations above 8,000. These locations have already been allotted to banks. In Phase 2, the remaining 164 clusters will be covered. Strong performance by PSBs in business, profitability Between FY 2022–23 and FY 2024–25, total business of PSBs rose from Rs 203 lakh crore to Rs 251 lakh crore. During the same period, net non-performing assets (NPAs) declined from 1.24 per cent to 0.52 per cent. Net profit increased from Rs 1.04 lakh crore to Rs 1.78 lakh crore, while dividend payouts grew from Rs 20,964 crore to Rs 34,990 crore.
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Business Standard
6 days ago
- Business
- Business Standard
IBPS allowed to use Aadhaar to verify candidates in bank exams
The Union Finance Ministry on Thursday authorised the Institute of Banking Personnel Selection (IBPS) to use Aadhaar-based authentication for verifying the identity of candidates appearing for exams and recruitment drives. 'This initiative aims to promote good governance and strengthen the integrity of the recruitment process in the banking, financial services and insurance (BFSI) sector by preventing impersonation and other malpractices during examination. It will ensure not only a fair and transparent recruitment process but also protect genuine candidates from being disadvantaged due to fraudulent activities. It will also simplify and expedite identity verification, reduce administrative burden and enhance public trust in the overall examination and selection system,' said the Finance Ministry statement. The IBPS came into existence as a society registered under the Societies Registration Act, 1860, and also as a public trust under the Bombay Public Trust Act, 1950. IBPS, which had its genesis in the new selection systems adopted by the banking industry in the post-nationalisation period, is an autonomous institute set up by the Reserve Bank of India, Central Financial Institutions and public sector banks. IBPS provides its services to organisations in the BFSI sector, including RBI, SEBI, NABARD, SBI, GIC, etc., many of which are regular members of the IBPS society. In addition, Central Public Sector Enterprises in varied sectors, state government departments/undertakings and municipal corporations also avail its services. Earlier this year, in April 2025, the Staff Selection Commission (SSC) had decided to implement Aadhaar-based biometric authentication in all its forthcoming examinations in order to verify candidates' identity on a voluntary basis, officials said on Sunday. This new measure will take effect for recruitment tests conducted from May 2025 onwards. Aadhaar is a 12-digit identification number issued by the Unique Identification Authority of India (UIDAI) to all eligible citizens, based on biometric and demographic data.
Indian Express
16-06-2025
- Business
- Indian Express
MGNREGS: a social security scheme you must know for UPSC Exam
Take a look at the essential events, concepts, terms, quotes, or phenomena every day and brush up your knowledge. Here's your knowledge nugget for today on MGNREGS. (Relevance: Government policies and schemes are an important part of the UPSC CSE syllabus, and previous years' questions highlight their significance. In this regard, knowing about the schemes that are in the news becomes important for the UPSC exam.) The Union Finance Ministry has capped spending under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) at 60% of its annual allocation for the first half of Financial Year (FY) 2025-26. There was no such spending limit until now. Civil society groups and MGNREGS worker unions have raised concerns about the move. In this context, let's know about the MGNREGS and concerns associated with spending limit. 1. MGNREGS is the world's largest social security programme aimed at enhancing livelihood security and reducing rural poverty. It is based on the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA, 2005). 2. The MGNREGA recognises employment as a statutory right. The Act signified a critical shift from this being a negative right under Article 21 of the Constitution (which mandated that the state must not interfere with your livelihood unreasonably) to a positive statutory obligation on the government to provide employment on demand. 3. It guarantees 100 days of employment in a year to rural households whose adult members volunteer to do unskilled manual work. 4. The act provides a legally-backed guarantee for any rural adult to get work within 15 days of demanding it; thereby serving as an effective social safety net during times of economic distress. Moreover, at least one third of MGNREGA beneficiaries have to be women. 5. Notably, while Section 3 (1) of the MGNREGA provides for 'not less than one hundred days' work per rural household in a financial year, it has become de facto upper limit as the NREGA software does not allow data entries for employment above 100 days to a household in a financial year unless specifically requested by the state/Union Territory. 6. However, in some cases, the government allows an additional 50 days of wage employment (beyond the stipulated 100 days). For instance, every Scheduled Tribe household in a forest area is entitled to get 150 days' work under MGNREGS, provided that such families have no other private property except for the land rights granted under the Forest Right Act, 2016. 7. Besides, the government, under Section 3(4) of the MGNREGA, can also provide an additional 50 days of unskilled manual work in a financial year, over and above the 100-day limit in rural areas where a drought or any natural calamity (as per the Ministry of Home Affairs) has been notified. 1. The MGNREGS has been brought under the Monthly Expenditure Plan/Quarterly Expenditure Plan (MEP/QEP), a spending control mechanism introduced by the Finance Ministry in 2017. MGNREGS was thus far exempt from MEP/QEP on account of being demand-driven. 2. There are some issues with this expenditure cap, such as: (i) Issue of fluctuating demand: By design, MGNREGS acts as a buffer for rural citizens, especially during times of lean harvests, freak weather events, and rural distress. Work demand under the scheme fluctuates throughout the year due to a number of reasons, primarily agricultural activities and weather patterns. MGNREGS work demand is highest between April and June, and picks up again after the kharif sowing season in September. But weather abnormalities such as delayed rains can lead to high MGNREGS work demand even in July or August. In 2023, for instance, low rainfall led to 20% higher work demand than usual in July and August, with Karnataka in particular spending more than 70% of the annual MGNREGS budget within six months due to extreme drought conditions. The expenditure cap does not take into account these contingencies. (ii) Question of legality: There is also a legal issue. Social security and welfare in India is implemented either via schemes designed and executed by the government of the day (for instance, PM Kisan Samman Nidhi or the LPG scheme), or through schemes based on specific legislation which establish certain programmes as statutory rights, like MGNREGS (based on MGNREG Act, 2005) or the Public Distribution System (based on National Food Security Act, 2013). The former can, and often are, altered, discontinued, or repackaged when a new government comes to power. For the latter, while the government does have the power to determine the modalities of implementing legislation, this power is conferred by the legislature and is limited in its scope. The 60% spending cap ordered by the Finance Ministry makes it virtually impossible to realise an entitlement that is legally guaranteed under the MGNREGA once the ceiling is reached. Over the past years, both central and state governments have undertaken various projects, schemes, regulations, and acts to fulfil the vision of Mahatma Gandhi. Let's know how MGNREGA, Swachh Bharat Mission and Make in India embody Gandhi's philosophy. 1. Swachh Bharat Mission: Mahatma Gandhi emphasised on swachhta as which ensures healthy life and society. For Gandhi, the drive for cleanliness in society was an integral part of the process in bringing about a casteless and free society. 'Everyone is his own scavenger,' said Gandhi, reiterating the fact that the need for making cleanliness a personal responsibility was key to removing untouchability. Sanitation was also considered a necessity by Gandhi in order to remove the label attached to Indians being in need for the West's civilising mission. Swaraj can only be had by clean, brave people,' wrote Gandhi in an article titled 'Our insanitation'. Keeping this in mind, the Indian government launched the Swachh Bharat Mission on October 2, 2014. The mission covers all rural and urban areas. The urban component of the mission is implemented by the Ministry of Housing and Urban Affairs, and the rural component by the Ministry of Drinking Water and Sanitation. 2. MGNREGA: It embodies Gandhi's belief in uplifting rural areas. This flagship programme provides economic security to rural households and enhances their purchasing power through promoting self-sufficiency in villages. in India: Gandhi spoke about 'swadeshi' during the freedom struggle. Today, in the era of globalization, the 'Make In India' initiative by the government aims to boost manufacturing in India and establish the country as a global manufacturing hub. This initiative is based on Gandhi's idea of self-reliance and swadeshi. Government schemes, from cleanliness to food security, education, and universal banking, are all in the spirit of Gandhi. POST READ QUESTION Consider the following statements regarding Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS): 1. The government has capped spending under the MGNREGS at 60 per cent of its annual allocation for the first half of the financial year 2025–26. 2. The Finance Ministry has directed the Ministry of Rural Development (MoRD) to include MGNREGS under the Monthly/Quarterly Expenditure Plan (MEP/QEP) framework. 3. Till now, the scheme has operated as a demand-driven programme with 40 per cent mandatory capping on the spending limit. How many of the statements given above are correct? (a) Only one (b) Only two (c) All three (d) None (Sources: MGNREGS demand down from pandemic peak, Explained: Centre's rationale behind MGNREGS spending cap, the problems with it, UPSC Issue at a Glance | Gandhi's Philosophy in Constitution and Government Policies) Subscribe to our UPSC newsletter. Stay updated with the latest UPSC articles by joining our Telegram channel – Indian Express UPSC Hub, and follow us on Instagram and X. 🚨 Click Here to read the UPSC Essentials magazine for May 2025. Share your views and suggestions in the comment box or at Roshni Yadav is a Deputy Copy Editor with The Indian Express. She is an alumna of the University of Delhi and Jawaharlal Nehru University, where she pursued her graduation and post-graduation in Political Science. She has over five years of work experience in ed-tech and media. At The Indian Express, she writes for the UPSC section. Her interests lie in national and international affairs, governance, economy, and social issues. You can contact her via email: ... Read More
Indian Express
15-06-2025
- Business
- Indian Express
Explained: Centre's rationale behind MGNREGS spending cap, the problems with it
Second byline: Purbayan Chakraborty The Union Finance Ministry has capped spending under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) at 60% of its annual allocation for the first half of Financial Year (FY) 2025-26. There was no such spending limit until now. The programme has been brought under the Monthly Expenditure Plan/Quarterly Expenditure Plan (MEP/QEP), a spending control mechanism introduced by the Finance Ministry in 2017. MGNREGS, which provides up to 100 days of employment to any rural household on demand, was thus far exempt from MEP/QEP on account of being demand-driven. Civil society groups and MGNREGS worker unions have raised concerns about the move. Here's why. Finance Ministry's rationale MGNREGS has long been plagued with financial troubles, which are perhaps what the Finance Ministry hopes to address by implementing the MEP/QEP mechanisms. Data from the Ministry of Rural Development show that over the last few years, more than 70% of the budget is frequently exhausted by September, and while supplementary allocations are often made in December, even these run out by January. This leaves significant pending dues by the end of the FY — over the last five FYs, pending dues have ranged between Rs 15,000 crore to Rs 25,000 crore. On average, 20% of the subsequent FY's budget is spent in clearing these. By implementing an expenditure cap, the Finance Ministry is likely ensuring an adequate budget will remain for the latter half of the FY, so that no supplementary allocation will have to be made. The MGNREGS budget for FY 26 stands at Rs 86,000 crore, and FY 25 ended with pending dues of Rs 21,000 crore. As on June 12, the Centre has released 28% of FY 25-26's budget. Pending dues for FY 26 stand at Rs. 3,262 crore, and for FY 25 at Rs 19,200 crore. Just clearing these dues will exhaust approximately 50% of the budget. Issue of fluctuating demand By design, MGNREGS acts as a buffer for rural citizens, especially during times of lean harvests, freak weather events, and rural distress. Work demand under the scheme fluctuates throughout the year due to a number of reasons, primarily agricultural activities and weather patterns. MGNREGS work demand is highest between April and June, and picks up again after the kharif sowing season in September. But weather abnormalities such as delayed rains can lead to high MGNREGS work demand even in July or August. In 2023, for instance, low rainfall led to 20% higher work demand than usual in July and August, with Karnataka in particular spending more than 70% of the annual MGNREGS budget within six months due to extreme drought conditions. The expenditure cap does not take into account these contingencies. There is a legal issue too. Social security and welfare in India is implemented either via schemes designed and executed by the government of the day (for instance, PM Kisan Samman Nidhi or the LPG scheme), or through schemes based on specific legislation which establish certain programmes as statutory rights, like MGNREGS (based on MGNREG Act, 2005) or the Public Distribution System (based on National Food Security Act, 2013). The former can, and often are, altered, discontinued, or repackaged when a new government comes to power. For the latter, while the government does have the power to determine the modalities of implementing legislation, this power is conferred by the legislature and is limited in its scope. The MGNREGA recognises employment as a statutory right. The Act signified a critical shift from this being a negative right under Article 21 of the Constitution (which mandated that the state must not interfere with your livelihood unreasonably), to a positive statutory obligation on the government to provide employment on demand. The 60% spending cap ordered by the Finance Ministry makes it virtually impossible to realise an entitlement that is legally guaranteed under the Act once the ceiling is reached. Constitutional courts have held that financial inability cannot be a reason to disregard statutory or constitutional duties, including in Swaraj Abhiyan v Union of India (2016), Municipal Council, Ratlam vs Shri Vardhichand (1980), and Paschim Banga Khet Mazdoor Samity v State of W.B. (1996). Lack of clarity There is currently no clarity on what will happen once the ceiling is reached. States could be forced to deny employment even when there is demand, or workers may have to work without timely payment. In both scenarios, statutory rights of the workers may be violated — the right to to receive employment within 15 days of raising the demand, as provided under section 3 of the MGNREGA, and the right to receive wages within 15 days of closure of work, as mandated under para 29 of schedule II of Act. To be sure, wage delays have been rampant in the scheme for years, and unemployment allowances and compensation for delayed payments have gone unpaid or been poorly calculated (as the Supreme Court has observed). However, the Finance Ministry's decision undermines the letter and spirit of the Act in an attempt to address the financial problems in MGNREGS. Laavanya Tamang is Senior Researcher with the Foundation for Responsive Governance, and affiliated with the NREGA Sangharsh Morcha. Purbayan Chakraborty is a Calcutta-based lawyer and works closely with the Paschim Banga Khet Majoor Samity, a trade union representing rural workers in West Bengal. All data accessed from MGNREGS MIS on June 12
