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India need to revise rates on small savings

India said in its mid-year review of the economy on Tuesday interest rates on small saving schemes needed to be revised in line with prevailing rates in the broader market.

"There is a need to revise the rate of interest on small savings in line with movements in market-related interest rates," the review said. "Pension and other retirement benefits need to be rationalised."

The Reserve Bank of India cut the benchmark bank rate 25 basis points to 6.25 per cent at the end of October in a bid to insulate the country's economy which is likely to be hit by poor farm output.

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