Newz Desk, Durgapur: The Central government has firmly ruled out any increase in commission for post office and small savings scheme agents, rejecting long-standing demands from agents’ associations. The decision comes at a time when declining household savings across the country has emerged as a matter of concern for the government as well as economists.
To encourage savings, interest rates on popular small savings schemes such as the Public Provident Fund (PPF), Recurring Deposit (RD), Monthly Income Scheme (MIS), National Savings Certificate (NSC) and Kisan Vikas Patra have remained unchanged for nearly two years. However, agents engaged in promoting these schemes have been demanding a revision of commission structures, citing reduced incentives and withdrawal of commissions from several schemes.
Agents point out that commissions on some products were cut years ago, while in others the commission system was completely abolished despite being in place earlier. They argue that commissions played a crucial role in motivating agents to encourage people to save, particularly in semi-urban and rural areas. With reduced incentives, they claim, their ability and enthusiasm to promote savings schemes has significantly declined.
Clarifying its stand, the Union Finance Ministry has stated that it is neither willing to increase commissions nor restore commission structures in schemes where they have already been withdrawn. At present, schemes such as the Senior Citizens’ Savings Scheme, Sukanya Samriddhi Yojana and PPF do not carry any commission for agents. A proposal to introduce commissions in the Senior Citizens’ Savings Scheme — aimed at enabling agents to facilitate doorstep services for elderly investors — has also been rejected.
Currently, two agency systems operate for small savings schemes across the country — the Mahila Pradhan Kshetriya Bachat Yojana, which is exclusively for women, and the Standardised Agency System, open to all. Together, these systems account for nearly 2.66 lakh agents nationwide. Until 2011, agents earned commissions ranging from a minimum of one per cent to a maximum of four per cent, depending on the scheme. Subsequently, commissions were reduced, with the minimum brought down to 0.5 per cent. At present, only women agents receive a four per cent commission on recurring deposits.
The Finance Ministry has reiterated that it has no plans to alter the existing commission framework. According to officials, a recent review of the commission system highlighted the need to promote digital transactions and encourage customers to directly invest in savings schemes through online platforms. This digital push, the ministry said, is a key reason behind its reluctance to revise commissions.
Post office agents, however, have expressed strong dissatisfaction with the decision, terming it unfair to a profession that employs lakhs of people. They argue that instead of cutting back on commissions, the government should enhance incentives to strengthen savings habits among the general public.
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