Special Correspondent

Says the State is facing financial stringency

KOZHIKODE: The policies of Central Government were having an adverse effect on State's economy, Finance Minister Thomas Isaac said at a review meeting of officials of Commercial Taxes department held in Kozhikode on Thursday.

It also impacted adversely on the State's Budget so much so the State was facing financial stringency even though the financial year had only started, the Finance Minister remarked at the meeting.

Loan

Of the Central Government loan of Rs.7,200 crore that would be available to the State the current financial year, the source for Rs.2700 crore was the National Savings Scheme. However, it had become doubtful if any loan would be available from NSC. Such a situation had arisen because of the Centre's decisions to withdraw income tax rebate that was available on investments made in NSC and to introduce a new condition that only individuals could make the investment. Reduction of interest rate and slashing of incentives that were available to mahila pradhan agents who mobilise investments in NSC had also considerably reduced scope for getting loans from NSC, the Finance Minister said.

Hold talks

"The Central Government should change its market-oriented perspectives and hold talks with State Governments on issues such as National Savings Scheme in keeping with the spirit of federal concept in Central-State relations," Dr. Isaac demanded.

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