The Centre has decided to borrow Rs 53,000 crore in cash to be available with the National Small Savings Fund this year at the prevalent interest rate of around 6 per cent.
The fund is cash-rich this year, with states swapping Rs 15,000 crore in 2002-03 and planning to pre-pay another Rs 41,000 crore in 2003-04.
According to finance ministry officials, the move will not only result in significant savings for the government but also give it easy access to funds.
It has been decided that the small savings fund will invest the cash available with it in government securities.
The investment can be through participation in bids when the government taps the market or through a private placement at current rates.
The officials said the high-cost debt pre-payment by states would reduce the Centre
