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Lok Sabha
Consequent to the acceptance of the recommendations of the Twelfth Finance Commission, Government of India has decided to dis-intermediate itself from the borrowing programme on behalf of States. From the current financial year the assistance from Government of India to State Governments to finance their annual plan will be in the form of grants only. State Governments will have to borrow directly from the market to finance the loan portion of Central Assistance. Government of India would intervene only for fiscally weak States that are unable to raise funds from the market.
Shri Palanimanickam, Minister of State for Finance gave this information in reply to a question raised by S/Shri D. Vittal Rao, Anandrao V. Adsul, Ravi Prakash Verma and Ganesh Singh.
BSC/BY/GN-274/05
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