The Congress has termed the reduction in interest rates in small savings as "irrational" and has demanded a rollback of the decision, and introduction of a loan interest waiver scheme in the backdrop of the worsening economic crisis.

"The government must waive interest on EMIs for the salaried middle class, farmers and other sections of society. This is no time to charge interest, but give extra to the people," said Congress spokesperson Jaiveer Shergill while addressing a press conference.

He said the decision on small savings would affect crores of depositors. "The BJP government must understand that this is not the time to extract a pound of flesh from the common man but pump oxygen into the income of people so that they can survive. The Modi government is taking out Rs 26,000 crore from the pocket of the common man by cutting down interest," Shergill said.

"The entire nation is going through economic grief and is looking for economic relief."

The Union Government has reduced the interest rates on small savings schemes by 70 to 140 basis points for the year 2020 during April-June quarter.

Public provident fund interest rates in the the quarter have been brought down by 80 bps to 7.1 percent and for KVP -- Kisan Vikas Patra -- have slashed by 70 bps to 6.9 percent and after reduction of 0.8 percent, the girl child-focussed Sukanya Samriddhi scheme now stands at the interest rate of 7.6 percent.