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Interest on small savings reduced

Government guarantees and tax incentives for these schemes would, however, continue, Sinha said presenting the budget in Lok Sabha.

The benefit of reduction in interest rate on small savings deposit will be fully passed on to the states.

Interest rates on loans portions of central assistance to state plans was being reduced by 50 basis point.

Sinha said a high level group would be set up to review the existing pension system and to provide a road map for the next steps.

Those who enter central government services after October 1, 2001, would receive pension through a new pension programme based on a defined contribution.

Facility of LTC to central government employees have been suspended for two years, he said adding standard licence fee on government accommodation was being enhanced from April 1, this year.

Sinha said he is providing Rs 42.43 billion towards the incentive fund to encourage states to implement monitorable fiscal reforms.

Devolution of central taxes to states was expected to increase by nearly Rs 90 billion in the coming year.

Budget 2001
Money

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