Investment in POSS Scheme forestalls financial frauds

Investment in POSS Scheme forestalls financial frauds

- Bruhaspati Samal  -

Financial frauds invite devastating consequences both for individuals and the economy of the nation as a whole. While digital payments have made life convenient and easy In India, they have also made us prone to all kinds of financial frauds. A survey conducted in October 2021 highlighted alarming statistics on financial frauds in India. Out of the respondents, 42% reported experiencing financial fraud within the past 3 years, with a concerning 74% unable to recover their lost funds. Shockingly, 29% admitted to sharing their ATM or debit card pin details with close family members, while 4% disclosed such information to domestic and office staff. Additionally, 33% admitted to storing sensitive financial data, including bank account details, card information, and passwords, on their email or computer, while 11% stored them in their mobile phone contact list. According to the RBI, frauds amounting to Rs. 60,414 crore were reported in 2021-22 and that these frauds have cost India a staggering Rs.100 crore daily over the past 7 years. 

Often due to a combination of deceptive tactics and vulnerabilities in the investment process including misappropriation, criminal breach of trust, forged instrument encashment, manipulation of accounts, fictitious accounts, unauthorized credit facilities, negligence, cash shortages, cheating, forgery, irregularities in foreign exchange transactions etc. financial frauds into various categories are severally witnessed to be mushrooming daily in newspapers, electronic channels and in social medias.  As experienced, the fraudsters often lure investors with promises of high returns with little to no risk. They may claim to have a "secret formula" or inside information that guarantees success. Greed and the desire for quick profits can blind investors to the red flags. In a  Ponzi scheme, early investors are paid returns from the contributions of new investors rather than from profits generated by the investment. This can create the illusion of a successful investment and attract more investors, but eventually, the scheme collapses when there are no more new investors to pay returns. At times, the fraudsters may misrepresent the nature of the investment, its risks, or the credentials of the individuals involved. They might falsify documents, provide fake testimonials, or use other deceptive tactics to give the appearance of legitimacy. Investments that are not properly registered with regulatory authorities are often a red flag for fraud. Fraudsters may offer unregistered securities to avoid scrutiny and oversight, but investors who fall for these schemes may find themselves with little recourse if things go wrong. It is also a common nature with the fraudsters to use high-pressure sales tactics for pushing investors into making quick decisions without conducting proper due diligence. They might create a sense of urgency by claiming that the opportunity is limited or that others are already investing. Some fraudsters target investors with complex investment products that are difficult to understand. This complexity can make it easier for fraudsters to obscure risks or misrepresent the investment's true nature. In some cases, investors are cheated because of inadequate regulation and oversight in the financial industry. The fraudsters exploit loopholes or operate in jurisdictions with lax regulatory enforcement, making it easier to perpetrate their schemes. Ultimately, the investors are cheated by fraudsters because they trust the wrong people or fail to conduct thorough due diligence before investing.  

But while investments in the National Small Savings Scheme, popularly known as the Post Office Small Savings Scheme (POSSS) can easily forestall the above deceptive tactics of the fraudsters, it is quite surprising that many people don’t consider it proper to think for this people’s bank which is said to be the Asia’s largest small savings bank.  To strongly counter the above tactics of the fraudsters on one hand and to keep the invested money safe and secured with a guaranteed return on the other, investments in different POSS Schemes should be preferably considered by the investors due to the following valid reasons.

1.  Accessibility: India Post has occupied the nervous system since 1854 which transmits the words and thoughts of the nation and since 1882 the Post Office Small Savings Bank offers widespread accessibility, with branches located in both urban and rural areas, ensuring convenient access to financial services for individuals across diverse locations. The POSB being the biggest and the oldest Savings Bank Organization in the country operates small savings schemes through a network of 1.59 lakh Post Offices with reach to the remotest corner of the nation.

2. Trustworthiness: Long before the times of email and mobile phones, Post Offices have a long-standing reputation for reliability and trustworthiness, instilling confidence in depositors regarding the safety and security of their savings with wide spread impact on  the socio-economic life of the nation through efficient and prompt service.

3. Government Backing: The Post Office being a government-regulated entity provides a reliable option for individuals who prioritize security of their hard-earned money. The POSB is being operated by the Department of Posts on behalf of the Ministry of Finance, Govt. of providing an additional layer of assurance for depositors regarding the safety of their funds.

4. Simple Procedures: The procedures for opening and operating accounts with Post Office Small Savings Bank are straightforward and hassle-free, making it an attractive option for individuals seeking simplicity in their banking transactions. Easy and acceptable methods in opening of account, subsequent deposits, withdrawals, closure and transfer attract the members of public towards POSB Schemes.

5. Range of Savings Schemes: Post Office Small Savings Bank offers a diverse range of savings schemes, including fixed deposits, recurring deposits, and various savings accounts, catering to the diverse needs and preferences of depositors. It offers POSB Accounts since 1882, Public Provident Fund (PPF) Account since 1968, 5 Year Recurring Deposit (RD) Account including 1 / 2 / 3 / 5 Year Time Deposit (TD) Account since 1970, Monthly Income Scheme (MIS) Account since 1987, Kisan Vikash Patra (KVP) since 1988, National Savings Certificates (NCS) since 1989, (VIII Issue), Senior Citizen Savings Scheme (SCSS) Account since 2004, Sukanya Samridhi Account (SSA) since 2015 and Mahila Samman Savings Certificate (MSSC) since 2023.

6. Competitive Interest Rates: Post Office Small Savings Bank offers competitive interest rates on its savings schemes, providing depositors with the opportunity to earn attractive returns on their savings over time. The interest rates applicable for the first quarter of the Financial Year 2024-25 on various National (Small) Savings Schemes are as under.

Sl.No.	Instruments	Rate of interest w.e.f  01.04.2024 to 30.06.2024​	Compounding Frequency*
01.	POSB Account	4.0	Annually
02.	1 Year TD	6.9 (Annual Interest Rs.708 for Rs.10,000/-)	Quarterly
03.	2 Year TD​​	7.0 (Annual Interest Rs.719 for Rs.10,000/-)	Quarterly
04.	3 Year TD​​	7.1 (Annual Interest Rs.719 for Rs.10,000/-)	Quarterly
05.	5 Year TD	7.5 (Annual Interest Rs.771 for Rs.10,000/-)	Quarterly
06.	5 Year RD​​	6.7	Quarterly
07.	SCSS Account	8.2 (Quarterly Interest Rs.205 for Rs.10,000/-)	Quarterly and Paid
08.	MIS Account​​	7.4 (Monthly Interest Rs.62 for Rs.10,000/-)	Monthly and paid
09.	NSC (VIII Issue)	7.7 (Maturity Value Rs.14,490 for Rs.10,000/-)	Annually
10.	PPF Account​​	7.1	Annually
11.	KVP	7.5 (will mature in 115 months)	Annually
12.	MSSC	7.5 (Maturity Value Rs.11,602 for Rs.10,000/-)	Quarterly
13.	SSA	8.2​	Annually

7. Tax Benefits: While deposits under PPF, 5 Year TD, NSC (VIII Issue), SCSS Account and SSA Account qualify for deduction under section 80C of Income Tax Act, 1861 making them tax-efficient investment options, interest earned under SSA Account tax free under Income Tax Act.

8. Flexibility: Post Office Small Savings Bank provides flexibility in terms of deposit amounts, withdrawal options, and tenure, allowing depositors to tailor their savings strategies according to their financial goals and requirements. In general, POSSs offer several other facilities to the customers too.  Through e-banking, account holder can deposit online in SB / RD / PPF / SSA schemes and open and close RD / TD account online. The depositor can also credit amount in SB, PPF and SSA accounts from their Account in any other bank or PO Savings Account to other Bank Account using NEFT / RTGS services of POSB. IFSC code of POSB is IPOS0000DOP. The depositors can also avail auto credit facility to get TD / MIS / SCSS interest directly into their Bank Account or PO Savings Account or auto credit RD deposit from PO Savings Account. They can get maturity value of Accounts / Certificates in their Bank Account by submitting copy of first page of passbook or cancelled cheque along-with account closure form. After receipt of passbook, depositor can check balance of his / her account using ‘Interactive Voice Response (IVR)’ facility by calling through the registered mobile number at India Post toll-free number 18002666868. Blocking of ATM card facility can also be availed through toll free number 18002666868.

9. Financial Inclusion: Post Office Small Savings Bank plays a crucial role in promoting financial inclusion by offering banking services to individuals who may have limited access to traditional banking institutions, thereby empowering them to participate in the formal financial system.

10. No market volatility:  Most importantly, unlike investments in stocks or mutual funds, Post Office schemes are not subject to market volatility, offering a stable and secure investment option, particularly during uncertain economic times.

Thus, investing in Post Office small savings schemes offers several compelling advantages. Overall, saving money in a post office provides a secure, stable and accessible way to grow savings without exposure to high risks, making it an attractive option for risk-adverse individuals and those seeking consistent returns with government backing.

(The author is a retired Postmaster and presently working as General Secretary, Confederation of Central Govt. Employees and Workers, Odisha State Coordination Committee, Bhubaneswar. eMail: bsamalbbsr@gmail.com,  Mobile: 9437022669)

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Labour is not a commodity

 

Labour is not a commodity

Bruhaspati Samal

General Secretary

Confederation of Central Govt. Employees and Workers

Odisha State Coordination Committee, Bhubaneswar

eMail: bsamalbbsr@gmail.com  

Mobile:9437022669

Emphasizing the inherent dignity of labour and the essential role of work in fostering human well-being and placing human beings at the center of economic and social development with a call for policies and practices that prioritize the welfare of workers and their families, the Philadelphia Declaration, adopted by the International Labour Organization (ILO) on May 10, 1944 asserts, inter alia that labour is not a commodity to be bought and sold but rather a means through which individuals can realize their potential and contribute to the common good of society.

In the global discourse surrounding economics and commerce, the notion of labour as a mere commodity has persistently lingered. However, reducing labour to a commodity overlooks the intrinsic human dignity and complexity intertwined with work. While conventional economic theories often treat labour as a factor of production, it will be more appropriate to say that labour transcends the boundaries of commodity exchange and embodies multifaceted dimensions that encompass personal identity, social relationships, and societal progress.

At its core, labour is not solely an economic transaction but a fundamental human expression. It is the manifestation of individual skills, talents, and aspirations. Each person brings unique experiences and capabilities to their work, shaping the character and quality of their contributions. From the artisan crafting a masterpiece to the scientist unravelling the mysteries of the universe, labour is an avenue for individuals to realize their potential and make meaningful contributions to society. Moreover, work often serves as a source of personal fulfillment and self-actualization. Through labour, individuals derive a sense of purpose, accomplishment, and identity. Whether it be through creative endeavours, intellectual pursuits, or service-oriented professions, work forms an integral part of an individual's self-concept and life satisfaction. Therefore, reducing labour to a commodity overlooks the intrinsic value it holds for individuals beyond monetary compensation.

Beyond its individual dimensions, labour also fosters social relationships and solidarity within communities. Workplaces serve as hubs of social interaction where individuals collabourate, communicate, and forge bonds with colleagues. Through shared goals and collective endeavours, labour cultivates a sense of belonging and cohesion among workers, contributing to the fabric of social capital within societies. Moreover, labour enables individuals to contribute to the well-being of others and the broader community. Whether through providing essential services, producing goods for societal needs, or engaging in philanthropic efforts, work serves as a conduit for advancing the common good. This interconnectedness highlights the interdependence of individuals and underscores the notion that labour transcends mere commodity exchange by fostering reciprocal relationships and collective flourishing.

Central to the argument against treating labour as a commodity is the recognition of the inherent dignity and rights of workers. Labour is not a fungible resource to be bought and sold at will but entails the respect for individuals' autonomy, well-being, and fair treatment. Upholding labour rights encompasses ensuring safe working conditions, fair wages, and equitable opportunities for advancement. Furthermore, viewing labour as a commodity risks perpetuating exploitative practices and inequalities within the labour market. From sweatshops to precarious employment arrangements, commodifying labour can lead to the devaluation of human worth and the erosion of workers' rights. Therefore, safeguarding the dignity and rights of workers necessitates acknowledging the multifaceted nature of labour and rejecting its reduction to a mere commodity.

In conclusion, labour transcends the confines of commodity exchange and embodies intrinsic human value, social relationships, and collective progress. By recognizing labour as more than a commodity, societies can strive towards fostering environments that uphold the dignity, rights, and well-being of workers. Moving beyond narrow economic paradigms, embracing a holistic understanding of labour is imperative for building more inclusive, equitable, and humane societies. In this context, despite being adopted in 1944, the Philadelphia Declaration remains profoundly significant in today's world.

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Revolutionary May Day Greetings and Red Salute to the workers of the world

Struggle has no end for workers: Thought of May Day

Struggle has no end for workers: Thought of May Day

Bruhaspati Samal

General Secretary

Confederation of Central Govt. Employees and Workers

Odisha State Coordination Committee, Bhubaneswar

eMail:bsamalbbsr@gmail.com

Mobile:9437022669

The International Labour Day, also known as May Day, is a global celebration of the labour movement and the achievements of workers. Its roots can be traced back to the late 19th century when workers around the world began to organize and advocate for better working conditions, fair wages, and the rights of labourers.  

The origins of International Labour Day can be found in the struggle for the eight-hour workday. During the Industrial Revolution, workers often endured grueling conditions, including excessively long hours with minimal pay. In the United States, the movement for an eight-hour workday gained momentum in the late 19th century, culminating in the Haymarket affair of 1886 in Chicago. On May 1st of that year, workers staged a nationwide strike demanding an eight-hour workday. The protests escalated, leading to a violent confrontation between police and demonstrators, resulting in several deaths and injuries. Despite the tragic outcome, the Haymarket affair galvanized the labour movement and inspired future generations of workers to fight for their rights. Following the events of the Haymarket affair, the International Socialist Congress declared May 1st as International Workers' Day to commemorate the struggle for the eight-hour workday and honour the sacrifices made by labour activists. Since then, International Labour Day has been celebrated annually in countries around the world, serving as a reminder of the ongoing struggle for workers' rights and social justice.

The significance of International Labour Day extends beyond its historical origins. It serves as a rallying point for workers to unite and advocate for their interests. From the early labour movements to present-day labour unions and organizations, International Labour Day provides a platform for workers to voice their concerns, raise awareness about labour issues, and push for meaningful change. One of the key aspects of International Labour Day is its emphasis on solidarity among workers, regardless of their nationality, occupation, or background. The celebration transcends borders and brings together people from diverse walks of life who share a common goal of achieving social and economic justice. By fostering solidarity and collective action, International Labour Day empowers workers to confront systemic injustices and strive for a more equitable society. Moreover, International Labour Day serves as a reminder of the progress that has been made in advancing workers' rights and improving working conditions. Over the years, labour movements have successfully campaigned for important reforms, such as the establishment of minimum wages, workplace safety regulations, and the right to collective bargaining. These achievements demonstrate the power of organized labour to effect positive change and improve the lives of millions of workers worldwide.

However, while much progress has been made, the struggle for workers' rights is far from over. In many parts of the world, workers continue to face exploitation, unsafe working conditions, and inadequate wages. Additionally, the rise of globalization and technological advancements has presented new challenges for the labour movement, such as precarious employment and the erosion of traditional job security. In Indian context, the condition of labour is complex and multifaceted, influenced by various socio-economic factors, historical legacies, and governmental policies. While significant progress has been made in certain areas, challenges persist, particularly regarding informal employment, low wages, inadequate social security, and workplace safety issues. Here's an overview of the condition of labour in India:

A substantial portion of India's workforce is engaged in the informal sector, which lacks job security, social benefits, and legal protections. Informal workers, including agricultural labourers, construction workers, street vendors, and domestic workers, often face exploitation, low wages, and precarious working conditions. They are more vulnerable to economic shocks, such as the COVID-19 pandemic, due to their lack of social security and access to healthcare. Despite economic growth and development, wage levels for many workers remain low, particularly in sectors such as agriculture, construction, and informal manufacturing. Minimum wage laws exist, but enforcement is often weak, leading to widespread non-compliance by employers. As a result, many workers struggle to meet their basic needs and are unable to lift themselves out of poverty despite their labour. Workplace safety and health standards are often inadequate in India, especially in sectors like construction, mining, and manufacturing. Workers are exposed to hazardous conditions, leading to accidents, injuries, and occupational illnesses. The lack of enforcement of safety regulations and the absence of mechanisms for redress exacerbate the risks faced by workers. Child labour remains a significant issue in India, despite legislative efforts to eradicate it. Millions of children are engaged in hazardous occupations, depriving them of education, health, and a childhood free from exploitation. Poverty, lack of access to education, and societal attitudes contribute to the persistence of child labour in various industries, including agriculture, manufacturing, and domestic work. Gender disparities persist in the Indian labour market, with women facing discrimination, unequal pay, and limited access to formal employment opportunities. Women are overrepresented in informal and precarious jobs, such as domestic work and agriculture, where they often lack legal protections and face exploitation. Gender-based violence and harassment in the workplace further exacerbate the challenges faced by female workers. India has comprehensive labour laws (now proposed to be implemented as Labour Codes) aimed at protecting the rights of workers, including provisions for minimum wages, working conditions, and social security. However, enforcement of these laws is often weak, with inadequate resources, corruption, and bureaucratic hurdles hindering effective implementation. As a result, many workers are unable to access their rights and seek redress for labour violations. Internal migration for employment is widespread in India, with millions of workers migrating from rural to urban areas or across state borders in search of livelihood opportunities. Migrant workers often face exploitation, discrimination, and precarious living conditions in destination areas, highlighting the need for policies to protect their rights and ensure their social and economic integration.

While India has made strides in improving the condition of labour, significant challenges remain in ensuring decent work, fair wages, and social protection for all workers. Addressing these challenges requires concerted efforts by governments, employers, civil society, and international organizations to strengthen labour laws, enhance enforcement mechanisms, promote decent work, and safeguard the rights and dignity of all workers, especially the most vulnerable.

It is worth mentioning here that the Trade unions play a crucial role in advocating for the rights and interests of workers and ensuring justice in the labour sector. Their responsibilities extend beyond mere representation of their members to actively engaging in collective bargaining, promoting social dialogue, and advocating for legislative reforms. The primary responsibilities of trade unions are to negotiate with employers on behalf of their members to secure better working conditions with healthy and safety workplaces, to protect the job security of workers by advocating against unfair dismissals, layoffs, and outsourcing practices, collective bargaining for fair wages that reflect the value of labour and enable workers to meet their basic needs and maintain a decent standard of living, extension of social security benefits to all workers, including access to healthcare, unemployment insurance, retirement pensions, and disability benefits, reasonable working hours and improved benefits. Through collective bargaining agreements, trade unions strive to ensure that workers are treated with dignity and respect in the workplace. The Trade unions may engage in political advocacy and lobbying efforts to influence government policies and legislation that impact workers' rights and interests. They have to campaign for labour-friendly laws, regulations, and social policies that promote decent work, economic justice, and social equality.

But unfortunately, the proposed labour codes by the Indian government aim to streamline and modernize labour laws, consolidating existing legislation into four codes to simplify compliance and improve the ease of doing business. While proponents argue that the codes will promote flexibility, boost employment, and enhance labour market efficiency, there are concerns about their potential impact on workers' rights and welfare. The proposed codes seek to introduce greater flexibility in labour regulations, allowing for easier hiring and firing practices, contract labour arrangements, and fixed-term employment contracts. While this flexibility may benefit employers by reducing labour costs and administrative burdens, it could also lead to increased job insecurity and precarious work arrangements for labourers, particularly those in the informal sector. The codes aim to rationalize wage and social security provisions, including minimum wages, social security benefits, and welfare schemes. While this could result in more uniformity and clarity in wage and benefit structures, there are concerns about potential reductions in wage levels and social security coverage, particularly for vulnerable workers in low-wage sectors. Consolidating labour laws into four codes is intended to simplify compliance for employers and reduce regulatory burdens. However, there are concerns that simplification may come at the expense of workers' rights and protections, with potential loopholes and ambiguities in the codes that could be exploited by unscrupulous employers to circumvent labour standards and evade responsibility. The proposed codes allow for greater use of fixed-term employment contracts and contract labour, which could lead to the contractualization of labour and erosion of permanent employment opportunities. This could undermine job stability, bargaining power, and social protections for workers, particularly in sectors where temporary or contract labour is prevalent. The codes introduce changes to the process of collective bargaining and unionization, including stricter requirements for union registration and greater restrictions on strike actions. These changes could weaken the bargaining power of trade unions and limit workers' ability to negotiate for better wages, working conditions, and benefits through collective action. The proposed codes aim to strengthen health and safety regulations in the workplace, including provisions for occupational safety and health standards, welfare facilities, and grievance redressal mechanisms. While this could improve workplace safety and address issues of occupational hazards and accidents, effective enforcement and implementation will be critical to ensure meaningful protection for workers. A significant proportion of India's workforce is employed in the informal sector, where labour regulations are often poorly enforced, and workers lack formal protections and social security benefits. The proposed codes may have limited applicability to informal sector workers, leaving them vulnerable to exploitation, unsafe working conditions, and inadequate wages. Thus,  while the proposed labour codes by the Indian government aim to modernize labour laws and promote ease of doing business, their impact on labourers will depend on the balance struck between flexibility for employers and protection for workers' rights and welfare. Effective enforcement, social dialogue, and stakeholder consultation will be essential to ensure that the codes promote inclusive and sustainable growth, while safeguarding the rights and dignity of all workers in India.

In conclusion, International Labour Day is a testament to the resilience and determination of the labour movement in its quest for justice and equality. From its humble beginnings as a protest for the eight-hour workday to its role as a global celebration of workers' rights, International Labour Day remains as relevant today as it was over a century ago. As we commemorate this day, let us honor the legacy of those who fought for the rights of workers and recommit ourselves to the ongoing struggle for social and economic justice for all.

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