New Delhi: The increase in the price of fertilisers was on March 11 withdrawn by Finance Minister Jaswant Singh.

"I have taken back the increase in the rate of fertilisers (to the tune of Rs 700 crore)," Singh said replying to the debate on the General Budget for 2003-04.

Singh announced reduction of one per cent interest rate on fresh loans given by the Centre to states.

He did not announce any rollback on diesel price hike.

Singh said the agriculture credit would be provided at PLR (Prime Lending Rate) plus or minus two per cent from April 1 2003. This will make agriculture credit 2 to 3 per cent cheaper.

The new PLR rate will be announced by Reserve Bank of India soon.

Singh said interest rates on loans and advances to government employees for housing, computer and conveyance will be reduced by one per cent.

He prefaced the withdrawal of fertiliser price hike saying the issue of mounting subsidy was a matter of grave concern and it had to be addressed at some point of time.

"But if you don't want any increase then so be it," he said pointing out that majority of the fertiliser subsidy went to help inefficient units and did not go to farmers."

PTI