Data on aggregate receipts from the different small savings instruments of the government show that in 2003-04, investments made in the PPF declined by Rs 220 crore (Rs 2.2 billion).

In 2003-04, aggregate PPF receipts fell to Rs 11,047 crore (Rs 110.47 billion) from the previous year's Rs 11,267 crore (Rs 112.67 billion). This is surprising as in the same year the economy recorded a phenomenal growth rate of 8.1 per cent.

Significantly, receipts from the PPF are much below the government's expectations. The government had projected a 12.7 per cent growth in receipts over that of last year. But, actual collections were only 87 per cent of the revised estimates for the last fiscal.

The lack of interest among investors has persisted in the first month of the new fiscal also. According to the monthly data released by the Controller General of Accounts, receipts in April 2004 under the PPF touched Rs 545.32 crore (Rs 5.45 billion), down from Rs 2,790.68 crore (Rs 27.91 billion) in the same month last year.

The PPF gives an annual rate of interest of 8 per cent, which is broadly in line with other small savings instruments.

The return is, however, lower than the 9.5 per cent rate of interest offered by the Employees' Provident Fund and the 9 per cent interest rate offered by the Varistha Pension Bima Yojana.

The government is also expected to introduce a new series of Dada-Dadi bonds at a comparable rate of interest for people above 60 years of age.

The declining preference among the middle class for the PPF is not a temporary phenomenon. It was only in 2002-03, probably because of the weak growth trends in the economy, that collections were much higher that the revised estimates.

However, collections from other savings deposits and certificates of investment have consistently exceeded the revised estimates. This trend, which was evident in the last fiscal too, has spilled over in the first month of the current fiscal.