Sub-Committee for succour to States,9.5% interest on small savings

New Delhi, Dec 9 (UNI) An NDC Sub-Committee has recommended that the interest rate on current National Small Savings Fund (NSSF) be retained at 9.5 per cent, but suggested that small savings collections be shared between the states and Centre in the ratio of 80:20 to provide succour to the former.

It has also suggested that interest rates on loans taken by state governments from NSSF from 1999-2000 to 2002-03 should be reset at 10.5 per cent with effect from April 1, 2007.

''The interest rate on these old loans will be reviewed if the interest rate on current loans is reduced or after three years, whichever is earlier,'' the Report says.

The present arrangement for sharing small savings collections is for 100 per cent transfer to the states.

The Report, however, gives an option to the states to take upto 100 per cent of their collections. The revised sharing pattern is to be effective from April 1, 2007.

The Report taken up at the NDC meeting here is titled 'Debt Outstandings of the States against the National Small Savings Fund'.

The Committee. headed by Union Finance Minister P Chidambaram, was set up by the last NDC in June 2005.

The main item on the agenda of NDC is approval of the 'Approach Paper to the Eleventh Plan'. However, the Report of the Sub-Committee has also been brought on the table of the meet.

MORE UNI GS PA BD1706