New
Delhi: The Indian government has advised the Reserve
Bank of India to issue instructions restraining states
from issuing guarantees for co-operative banks.
This
was stated by Finance Minister Jaswant Singh while addressing
the Parliamentary Standing Committee meeting here. "The
consolidated debt of all the states at 35 per cent of
the GDP (gross domestic product) is unsustainable and
urgent steps are required to rectify the situation,"
he said.
A
mechanism needs to be developed to help the states that
which are in financial difficulties, without affecting
those who have conducted their affairs well, he said.
"States should avoid resorting to competitive structuring
of the state annual plan to get higher allocations."
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