Govt to tap small savings fund to meet states' needs
New Delhi: The government plans to allow states to tap the National Small Savings Fund (NSSF) to meet states' requirements for externally-aided projects. The center plans to allow State governments to borrow about Rs 8,000 crore from the fund next year.

The move is an attempt to bridge the gap between the budgetary support given by the finance ministry and the demands made by states. Officials said that NSSF would be used to fill the gross budgetary support gap.

The budgetary support for 2006-07 could be increased by 19 per cent to nearly Rs 1,71,000 crore, compared to the support of Rs 1,43,497 crore allocated for the present fiscal.

The government said that while raising funds from the market, prosperous states score over the poor states, further resulting in regional imbalances. Outside borrowing in externally-aided project leads to fiscal pressure. The move will benefit the poor states, as it will help them get funds as loan with a return moratorium for five years along with an extended tenure of loan repayment. The utilisation of NSSF will create an opportunity for the states to meet the matching requirement of the projects.
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M'shtra to reduce stamp duty on loans
Mumbai: The Maharashtra government has decided to reduce stamp duty loans to 0.1 per cent from 0.25 per cent as prescribed earlier. To the relief of companies, the state government is also reducing the ceiling on stamp duty on loan agreements to Rs 5 lakh from Rs 10 lakh.

Stamp duty is tax paid for a transaction performed by way of a document or instrument under the provisions of state stamp Acts and the Indian Stamp Act, 1899. Following the reduction, all corporate and retail borrowers will have to pay Rs 100 as stamp duty per Rs 1-lakh of loans availed.

Maharashtra accounts for nearly 30 per cent of all loans disbursed in the country. The total credit offtake in the country in 2005-06 is expected to be around Rs 3,00,000 crore. Additional revenue generation from this levy for the state government will be about Rs 100 crore a year.

The state government has also agreed to forgo stamp duty on agreements relating to sale or purchase of government securities. It, however, declined to sacrifice stamp duty revenue on sale and purchase of corporate paper, banking sources said.
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Inflation stable on cheaper edible oils
New Delhi: Inflation continued to be stable at 4.08 per cent as food and edible oil prices fell. The annual wholesale price index-based inflation rose 4.08 per cent during the week ended February 4, lower than the previous week's annual rise of 4.3 per cent.

The fall in inflation rate was largely on account of a fall in food and edible oil prices, according to data released by the Ministry of Commerce and Industry.

The inflation rate was at 4.96 per cent during the corresponding week of 2005. The Wholesale Price Index (WPI), which ended the latest reported week at 196.2 points, was at 188.5 points a year ago.

The primary articles' group index fell 0.7 per cent to 193.3 points due to cheaper food and non-food items. The index was 184.1 points a year ago. The fuel, power, light and lubricants' group index rose 0.1 per cent to 311.4 points due to costlier aviation turbine fuel (3 per cent) and furnace oil (2 per cent).

The index was 289.5 points during the corresponding period a year ago. The group index for manufactured products was up 0.1 per cent to 171.5 points due to an increase in prices of food, non-metallic mineral, base metals and machinery tools.

The index was 167.5 points during the same week a year ago.
Among the primary articles' group, the index for food articles group fell 0.8 per cent to 195.1 points due to lower prices of arhar (5 per cent), fish-inland (4 per cent), jowar (2 per cent) and bajra, fruits and vegetables, wheat, condiments and spices, gram, maize, urad and ragi (one per cent each). But moong and barley were costlier by 1 per cent.
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