The high-level expert committee headed by Shaymla Gopinath, former deputy governor of the RBI, envisages an overhaul of the Public Provident Fund (PPF) scheme. Investors will now be able to put in Rs 1,00,000 every financial year instead of Rs 70,000, and will get a return of 8.6 per cent - 0.6 per cent more. While PPF has a lock in period of 15 years, though one can withdraw 40 per cent after completion of 7 years, the scheme does offer compounded interest on the principal - every year.

Postal savings interest rates will increase from 3.5 per cent to 4 per cent. The government will also reduce maturity terms of monthly investment products and national savings certificates from six years to five years.

There's all likelihood that these recommendations will be implemented as the current structure of saving schemes has resulted in volatile cashflow and diffcult fiscal management. The reason is that since returns on small savings schemes is tied to government securities, the comparitively less return on investment in government schemes has been resulting in either large inflows or large outflows of deposits by customers. Since federal and state governments depend on government small saving schemes - this volatility makes it difficult for them to manage government spending on a national and state basis.