New Delhi: Prime Minister Atal Behari Vajpayee will hold a meeting with state Chief Ministers and Finance Ministers on October 18 to discuss the financial crisis of states.

Disclosing this, Kerala State Finance Minister K Shankaranarayanan told reporters on September 12 that the main agenda of the meeting would be to find a solution to the financial problems of the state governments.

"Some states are in a very bad shape and efforts should be made to facilitate them to reduce their interest rate burden in the wake of low interest rates prevailing currently," he said.

"It should be done without any delay and the PM's meeting with the State Chief Ministers which has been scheduled for October 18 would discuss this issue," he said.

He said the Kerala government was also facing a financial burden though the situation had marginally improved as compared to the last year.

He warned of worse financial crisis in the state if the Centre did not take steps to compensate the losses it could accrue after introduction of VAT in 2003 as it was a "consumer state".

"We are a consumer state to the extent of about 76 per cent and as such our deficit is between Rs 250 crore to Rs 300 crore every month. We want the Centre to bridge the gap in case we lose in VAT regime," he said.

PTI