(a) whether it is a fact that Planning Commission have suggested reduction in the interest rate
that the Sates pay on all outstanding central loans;
(b) if so, the details thereof;
(c) whether it is also a fact that the rate of interest on Central loan is much higher than the market rate;
(d) if so, the reasons therefor; and
(e) whether the Government have taken a final decision on the suggestion of Planning Commission?
MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI S.S. PALANIMANICKAM)
(a) No, Sir.
(b) Does not arise.
(c) and (d) The rate of interest on Central loans, which is fixed keeping in view all the
relevant factors, including the cost of borrowings, maturity mismatch, etc., has been reduced
from 10.5 percent to 9 percent with effect from April 1, 2004 in pursuance of the Budget announcement, 2004-05.
(e) Does not arise.