The states have asked the finance ministry to reduce the entire debt they owe the Centre to seven per cent rate of interest.
It should be a major terms of reference for the committee, to be set up to rework the debt burden of the states, they told finance minister Yashwant Sinha. It would mean that the entire debt, owed by the states to the Centre, would have to be combined at the new rate. According to the Ninth Finance Commission
