Lack of officers, cut in commission led to mushrooming of chit funds in state
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The recent trend of mushrooming of agro-based chit funds, which have come under the scanner of Security Exchange Board of India (SEBI) for alleged illegal operations, is being attributed to the lack of manpower in the small saving directorate in West Bengal.
The Centre's decision to cut the commission paid to the agents involved in collecting money from small-saving schemes is cited as the second most important reason for the growth of chit funds in the state.
According to state government sources, the infrastructure of small saving directorate of the state finance department is inadequate. "The small saving directorate has a sanctioned strength of 20 deputy directors. But there are only six deputy directors," said an official on condition of anonymity.
Deputy directors and saving development officers help agents collect money from people. But in several districts, there is no deputy director and many blocks in the state do not have a saving development officer. According to the official, 14 posts of deputy directors are lying vacant for several years. "Also, nearly 290 posts of saving development officer are lying vacant for several years," the official added. The total sanctioned strength of saving development officer — who played the most important role in channelising funds in small saving schemes — in West Bengal is 366.
The second reason cited is the lowering of the agents' commission.
According to Finance Department officials, the Centre, on the line of recommendation of Shyamala Gopinath Committee, had lowered the agents' commission from 1 per cent to 0.5 per cent in lucrative small saving schemes and withdrew the commission from Public Provident Fund and small saving schemes for senior citizens. "In West Bengal, there are 30,000 agents under Standardized Agency System. They moved the court against the lowering of the commission. We support the movement of the agents because the move has actually hit the small savings in West Bengal. The state government used to provide such rewards on commission of the agents earlier. But the Centre had directed all state governments not to provide cash rewards. This is another reason for the fall in the collection," the official added.