Budget to address problems of low FD interest rates

NEW DELHI: Concerned over the plightof pensioners and others who depend on fixed deposits for income, the governmentsaid on Tuesday it would seek to address the problems due to decline in FDinterest rates in the coming Budget.
"We will do something about it in thenew Budget," Finance Minister Jaswant Singh said replying to supplementariesduring Question Hour in the Rajya Sabha.
"The government is fully alive todifficulties caused due to decline in interest rates", he said adding theFinance Ministry was trying to take steps to "somehow" compensate the investors.
In reply to a query, Singh said it may not be possible for the interestrates to jump back to the earlier level of 13 per cent as the Indian financialsystem was getting aligned with international rates.
The Finance Ministermade it clear that the task of regulating interest rate fluctuations was vestedwith the RBI.
He said there has been a reduction of 1 per cent to 3 percent in the rate of interest on fixed deposits in financial institutions duringthe period March 1999 to October 2002.
Singh denied there was any collapseof the interest rates in the country.
On the plight of the State FinanceCorporations, Singh said out of the 18 SFCs, only four had a positive net worthas on March 31, 2002.
The accumulated losses of all these SFCs during2001-02 aggregated to Rs 4,198 crore.
Singh made it clear that it was forthe state governments to take steps for rehabilitation of state financialinstitutions.
He said the SFCs Act was amended in 2000 for providingflexibility and functional autonomy for them.