With private investment yet to pick up, Finance Minister Arun Jaitley on Saturday wondered whether it is desirable to continue offering high interest rates on savings that translate into higher cost of lending and sluggishness in the economy. India, he said, has ‘peculiar’ characteristics of having ‘quite high’ percentage of domestic savings.
“Now, whether domestic savings are only to be used by such instruments which give you a higher return and create an interest regime which is extremely costly and makes the economy sluggish, or higher returns are to be got from such instruments as funds, bonds, shares (that finance projects and economic activity),” he asked.
Speaking at a function here to unveil a commemorative postage stamp to mark 140 years of BSE, he said the essence of all economic activity is investment which is going to come from where resources are available.