Centre signals further interest rate cut in small savings

Centre signals further interest rate cut in small savings

KOLKATA, MAR 4: The Centre intended to bring down further the interest rates on small savings, which was cut down by 1.5 per cent in the Union Budget, to effect a lower lending rate at par with the international level.

However, the Centre has formed a ministerial Committee, headed by Union Home Minister L K Advani, to formulate strategies to enable the sector survive the global competition, he said, adding the Committee would submit its report soon. "The small-scale sector has its sympathisers in the government. We are fully aware of its problems. The Committee is looking into all aspects," Shettigar said.

The Committee, which was formed five months ago, also has as its members Union Finance Minister Yashwant Sinha, Deputy Chairman of Planning Commission K C Panth and Minister for Small-scale Industries Vasundhara Raje Scindia.

Shettigar brushed aside the criticisms on the amendment in Industrial Disputes Act and Contract Labour laws saying "these would actually help generate more employment. The labourers will also get better compensation if any unit is closed down." Asked on the disinvestment of shares in profit earning public sector units, he said "the government has decided that it has no business to be in any business except strategic areas".

Since disinvestment in PSUs had to be done through share transfer, it was important to divest stake when the shares were doing well. "If a company becomes sick in future, it will become difficult to fetch a good price as its shares will fall," he said.