The Cabinet also approved a draft resolution for the state assembly meeting for its budget session to repeal the Public Debt Act 1944 and replace it by a Government Securities Act. The Union Finance Minister has sent a reference to the state government proposing the repeal of the act and its substitution. While the Centre has already approved the proposal, it would be given effect only with prior consent of all the state governments.

The inaugural address of Governor Mahabir Prasad to the state assembly and the legislative business was also approved and discussed by the Cabinet. An official statement today stated that the Centre had undertaken a comprehensive review of the Public Debt Act, 1944, and other aspects of government securities management to rationalise rules and procedure. This hadbeen done by a committee, consisting of representatives of Reserve Bank of India (RBI), Union Ministries of Finance, Law and Justice apart from state governments of Madhya Pradesh, Maharashtra, Tamil Nadu, Uttar Pradesh and West Bengal. The committee had made recommendations to amend various sections of the existing Public Debt Act and replace it by the Government Securities Act.

At present, borrowing of the state were in the form of government securities, managed by the RBI and were being regulated by the Act. Certain rigidities in the Act and the rules had come to the notice of the Central Government, the press statement added.