Mahila Samman Saving Scheme 2023: A Step Towards Women's Financial Empowerment - IMPRI Impact And Policy Research Institute

Policy Update
Arohi Sanyal

Background

As the country aims to become a vishwa guru, meaning world leader India still lacks in financial inclusion of women. As per a report of the National Statistical Office (NSO), as of March 2023, only 36.4 percent of bank accounts out of total individual accounts belong to women (Rajora, 2024).

To make women more financially savvy, the government has started taking steps to encourage women to invest and be financially secure, and one of the schemes is the Mahila Samman Saving Scheme. The scheme was announced by Finance Minister Smt. Nirmala Sitaraman in her budget speech 2023-24.The aim of the scheme was to encourage all women and girls to invest.The scheme was announced to celebrate Azadi ka Amrit Mahaotsav. One of the most distinguished features of this scheme is that there is no age bar in it, encouraging each and every woman to invest in it.

To give an overview of the essay I would first begin by highlighting the features of the scheme. Next, I would analyze the performance of the scheme from the date over the time and what are the drawbacks of the scheme . Finally I would analyze how the scheme can be improved and what changes can be made to it.

Features Of The Scheme

Through this scheme, the government has encouraged women to invest and build financial security for themselves. The main benefit of this scheme is that it is absolutely a safe investment, and women do not fear that there will be a loss from investing in this scheme (Acharya, 2024). The scheme allows a woman to open an account on or before March 31, 2025 for a tenure of two years at an interest rate of 7.5% per annum, which will be compounded quarterly (Mahila Samman Savings Certificate, n.d.).

Every woman can open only one account under this scheme, and for opening another account, she must wait for a period of at least 3 months (Union Bank Of India, 2023). A woman must deposit at least one thousand rupees in multiples of rupees one hundred and a maximum of two lakh rupees (Central Bank Of India, 2023).

The scheme also allows for premature closure in case of the death of the account holder or, medical emergency, if the account was opened in the name of a minor and the guardian dies and there is financial difficulty, the account can be closed

Performance Of The Scheme

Over 22.5 lakh accounts have been opened under the Mahila Samman Saving Certificate Scheme (MSSCS) in the first nine months of the fiscal with a deposit of over ₹14,500 crore. As per the data Maharashtra has the highest number of accounts under this scheme with an overall deposit of 2,800 crore followed by Tamil Nadu with an overall deposit of 1,600 crore then Odisha with an overall deposit of 1,000 crore in Karnataka and Andhra Pradesh with an overall deposit of 1,200 crore and 600 crore respectively(Sinha, 2024).The final data and effectiveness of the scheme can be more clearly understood after March 31st 2025 .

Drawbacks Of The Scheme

One of the major drawbacks of the scheme is that this scheme is only adopted by a few banks and post offices ,hence in case a woman lives in a rural area where the prescribed banks are not there she would not be able to take benefit of this scheme. Another drawback of this scheme is that the scheme has a lock-in period of five years unlike other fixed deposits which offer more flexibility regarding the period of lock-in (Bajaj Finance, n.d.). In case a woman closes it early due to some emergency situation the interest rate becomes lower (Policybazaar, n.d.)

Way Forward

The government has taken a small initiative to help women in being financially secure. Unfortunately, due to the small tenure of the scheme and the schemes being limited to a few banks it restricts many women from enjoying the benefit of it. The government has tried its best to publicize the scheme but has failed to create enough publicity as the scheme was only published in the newspapers like Economic Times, which mostly the higher class people read hence the illiterate women have no idea about this scheme.

A way to improve the situation would be that the scheme become applicable to all government and private banks with an extended tenure. In this manner, many more women would be able to take advantage of the scheme.

References

Acharya, M. (2024). Mahila Samman Saving Certificate Scheme – Eligibility, How to Apply, Calculation, Interest Rate, Tax Benefits. Clear Tax. https://cleartax.in/?utm_ref=content_pages_navbar
Bajaj Finance. (n.d.). Mahila Samman Certificate Scheme vs Fix Deposit. Bajaj Finance. https://www.bajajfinserv.in/investments/mahila-samman-savings-certificate-scheme-vs-fixed-deposit
Central Bank Of India. (2023). Mahila Samman Savings Certificate, 2023. Central Bank Of India. http://www.centralbankofindia.co.in/en/Mahila_Samman_Savings_Certificate
Mahila Samman Savings Certificate. (n.d.). Ministry Of Finance. https://www.myscheme.gov.in/
Policybazaar. (n.d.). Mahila Samman Savings Certificate. Policy Bazar. https://www.policybazaar.com/life-insurance/pension-plans/articles/mahila-samaan-savings-certificate/#:~:text=Premature%20Closure%20of%20Mahila%20Samman,also%20be%20the%20regular%20rate.
Rajora, S. (2024). Only 21% of money in bank accounts belongs to women, shows NSO data. Business Standard. https://www.business-standard.com/
Sinha, S. (2024). Mahila Samman Savings Certificate collected over ₹14,500 crore in 9 months. Business Line. https://www.thehindubusinessline.com/
Union Bank Of India. (2023). Mahila Samman Saving Certificate. Union Bank Of India. https://www.unionbankofindia.co.in/english/mahila-samman-savings-certificate.aspx

About The Author- Arohi Sanyal is a research intern at IMPRI . She has done her Masters in Gender Studies from Dr.B.R.Ambedkar University , Delhi with a keen interest in gender based issues.

Acknowledgement- The author would like to thank Aasthaba Jadeja , Dr. Arjun Kumar and experts involved in reviewing this article and giving their valuable insights.