Vajpayee appeals for state cost cuts

The Indian Prime Minister, Atal Behari Vajpayee, has asked all states urgently to streamline their financial policies to reduce the national debt.

He also called for reductions in the size of the state government apparatus and for efficiencies in state-run power companies to cut costs.

Mr Vajpayee was addressing the sixth Inter State Council in Delhi convened to discuss relations between India's central government and the states.

He defended recent cuts in subsidies for essential commodities, saying Delhi was working to rationalise central subsidies and was committed to expansion of reforms in the public sector.

But the Chief Minister of the southern state of Andhra Pradesh, Chandrababu Naidu said susbsidies should be kept until a large cross section of people attain comfortable levels of income.

From the newsroom of the BBC World Service