New Delhi, June 28: Prime Minister Manmohan Singh today gave in to Bengal chief minister Buddhadeb Bhattacharjee’s demand that the Centre’s new debt relief scheme be reviewed.

The Prime Minister said a sub-committee of the National Development Council (NDC), headed by finance minister P. Chidambaram, would review the scheme.

The panel will consider whether the loans taken by states from the National Small Savings Fund (NSSF) should be brought within the scope of ‘debt-relief’.

On Monday, Bhattacharjee had criticised the Centre’s new scheme saying “it is much too inadequate to be of any significant assistance, particularly to states like Bengal.”

“What is more disturbing for Bengal is that the NSSF loans from 1999-2000 onwards have been excluded from the scope of relief,” he added.

The Prime Minister said the Centre will evolve a mechanism to address the concerns regarding the debt burden of states. Bhattacharjee had strongly criticised the Twelfth Finance Commission for ignoring the views of the states while drawing up its recommendations.

“A number of chief ministers have expressed concern about issues related to state finances, particularly the effect of the recommendations of the Twelfth Finance Commission. I believe the finance minister will work to allay any apprehensions that may exist,” Singh said while delivering his concluding remarks at the two-day NDC meeting.

Many states have complained about the Commission's recommendations on the level of permissible market borrowings and the interest charged on them, Singh said.

“Healthy state finances are as important as central finances and fiscal prudence and stability must be our joint endeavour,” he added.

“I urge that all centrally sponsored schemes in the state subjects be transferred to the states with funds as soon as possible,” he said.