National Small Savings Fund
Also called: NSSF · Topic: Government Budget, Fiscal Policy and FRBM · NCERT: Beyond NCERT
Meaning
The National Small Savings Fund (NSSF) was set up in 1999-2000 inside the Public Account of India. The Public Account holds money that the government keeps as a banker or trustee for others. The NSSF collects the money people put into small-savings schemes such as PPF, NSC and post-office deposits. It then lends this money to the Centre, and earlier also lent to states, to finance their deficits. Interest rates on small savings are usually above market rates, so this is a costly way for the government to borrow.
Example
When a family deposits money in a post-office scheme, the money goes to the NSSF. The NSSF lends it to the Centre to cover part of the fiscal deficit. The Food Corporation of India (FCI) also borrowed from the NSSF to cover unpaid food subsidy, which kept that cost off the budget. Budget 2021-22 brought this back on budget.
Don't confuse with
- Consolidated Fund of India: all government revenues and loans go into this fund, and money can leave it only after Parliament passes a law. NSSF money sits in the Public Account because it belongs to savers.
Related concepts
- Government budget
- Financial year
- Consolidated Fund of India
- Public Account of India
- Contingency Fund of India
- Charged expenditure