Net mopup under small savings schemes set to exceed Rs 3.6 lakh crore target

New Delhi: The net collections in small savings schemes are set to exceed the budgeted target of Rs 3.59 lakh crore for the current financial year 2026-27 by a fair margin, with inflows in the first four months of the fiscal year up 56% from a year earlier, people aware of the matter said.

Savings deposits and certificates under the National Small Savings Fund stood at Rs 1.54 lakh crore in April-July 2026 against Rs 98,259 crore in the year-ago period. The four-month inflow is already around 43% of the full-year target.

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Considering a large part of such deposits traditionally flows in the March quarter, driven by the year-end rush for tax-saving instruments, officials expect the overall FY27 collections to exceed the initial target with a "fair" margin.

The inflows into small savings schemes, including Public Provident Fund and Sukanya Samriddhi Yojana, senior citizen saving schemes provide an additional layer of comfort to the central government, lowering its market borrowing requirements.

The Centre has already lowered gross market borrowing in the current fiscal year to Rs 15.99 lakh crore from Rs 17.2 lakh crore budgeted last week. The Centre has budgeted for Rs 3.87 lakh crore of net financing through small savings in the current fiscal. Net National Small Savings Fund (NSSF) financing stood at Rs 1.16 lakh crore in April -July.

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The trend is backed by last year's performance. The government had initially budgeted Rs 3.06 lakh crore of net small savings collections for financial year 2025-26, later revised to Rs 3.42 lakh crore. Actual collections exceeded the revised estimate by more than Rs 1 lakh crore.

The government has raised the target to Rs 3.59 lakh crore for FY27, about 5% above last year's revised estimate.

"Despite large retail participation in equity market instruments, the collection trend for small savings is very encouraging and we will comfortably exceed the budget target by a fair margin, almost closer to last year," a senior official told ET.

The strong flow into small savings reflects continued demand for predictable, government-backed returns, unaffected larger investor participation in the equity market or market linked instruments, the official said.

Current small-savings rates range from 6.9% on one-year deposits to 8.2% on the Senior Citizens' Savings Scheme and Sukanya Samriddhi, with PPF at 7.1% and NSC at 7.7%, better than other savings instruments.