IVP Full Form-Indira Vikas Patra

Indira Vikas Patra: A Historical Savings Instrument in India 

Introduction 

Indira Vikas Patra (IVP) was a popular savings scheme introduced by the Government of India in 1986 to encourage small savings among citizens. It was a fixed-income investment scheme, designed to double the principal amount within a specific period. The scheme was widely accepted due to its simplicity, guaranteed returns, and tax-free benefits. 

This article explores the features, benefits, and reasons for discontinuation of Indira Vikas Patra and its impact on small savings investors in India. 

What is Indira Vikas Patra? 

Indira Vikas Patra was a non-tax saving, bearer instrument introduced to promote financial inclusion and small savings. It was offered through post offices and banks, making it accessible to a large population. 

• The investment amount doubled in approximately 5.5 years. 

• The certificates were available in denominations of ₹200, ₹500, ₹1,000, ₹5,000, and ₹10,000. 

• IVP certificates were transferable and encashable before maturity under certain conditions. 

• There was no requirement for KYC (Know Your Customer) at the time of purchase.  

Key Features of Indira Vikas Patra 

1. Fixed Returns 

• IVP guaranteed that the investment amount would double in a fixed tenure. 

• The interest rate was pre-determined and compounded semi-annually. 

2. No Tax Benefits 

• Unlike other small savings schemes, IVP did not provide any income tax exemptions. 

• However, the scheme was still attractive due to its high returns and security. 

3. Transferability & Encashment 

• The certificates could be transferred from one person to another. 

• Premature encashment was allowed after a minimum lock-in period, with some penalties on returns. 

4. No Identity Disclosure 

• Since the scheme was in bearer form, there was no need for KYC documents. 

• This made IVP a preferred savings option for individuals who wanted anonymity in investment. 

Benefits of Indira Vikas Patra 

✅ Guaranteed Returns 

• The scheme offered fixed and risk-free returns, making it a reliable investment option. 

✅ Ease of Investment 

• IVP certificates were available at post offices and banks, making them accessible to a broad audience. 

✅ Liquidity & Transferability 

• Investors could transfer the certificate to another individual. 

• Partial or premature withdrawals were possible with certain conditions. 

✅ No Maximum Investment Limit 

• Unlike other small savings schemes, IVP had no upper investment cap, allowing high-value investments. 

✅ Financial Inclusion 

• Encouraged savings among small investors and rural populations who had limited access to formal banking. 

Why Was Indira Vikas Patra Discontinued? 

Despite its success, Indira Vikas Patra was discontinued in 1997 due to several concerns: 

❌ Money Laundering & Black Money Issues – The scheme’s bearer nature made it vulnerable to misuse, as there was no requirement for identity verification. 

❌ Lack of Transparency – Since the certificates could be transferred anonymously, they were used for undisclosed transactions. 

❌ Evolving Financial System – The introduction of Kisan Vikas Patra (KVP) and other tax-saving schemes reduced the need for IVP. 

❌ Regulatory Concerns – With increasing emphasis on financial regulation and anti-money laundering laws, bearer instruments like IVP were considered risky.  

Alternative Investment Options 

After the discontinuation of Indira Vikas Patra, the government introduced several regulated savings schemes, such as: 

🔹 Kisan Vikas Patra (KVP) – Similar to IVP, but with identity verification. 

🔹 Public Provident Fund (PPF) – Long-term savings with tax benefits. 

🔹 National Savings Certificate (NSC) – Fixed-income investment with tax exemptions. 

🔹 Fixed Deposits (FDs) – Offered by banks with flexible tenures. 

🔹 Post Office Monthly Income Scheme (POMIS) – Guaranteed monthly interest payouts. 

Indira Vikas Patra played a significant role in promoting small savings and financial inclusion in India. However, its lack of transparency and regulatory loopholes led to its discontinuation. Today, investors have multiple secure and well-regulated savings options to choose from, ensuring better financial security and compliance.