New Delhi: President A P J Abdul Kalam on April 9 asked both Centre and states to address the issue of mounting debt burden and orient their financial management towards higher economic growth and poverty reduction.

"Many states are burdened with debt. The Union Budget also shows that one-fourth of total receipts go for interest payments," Kalam said, highlighting the unsustainability of the mounting debt.

Addressing the golden jubilee function of the Finance Commission, he directed the 12th Finance Commission to evolve a mechanism for efficient resource allocation to ensure poverty reduction through proper fiscal management.

To realise the government's goal to make India a "developed country", Kalam said the economy has to grow by 9.0 per cent in the years to come so that the entire 260 million people below poverty line are uplifted by 2020.

In this context, he said the 10th Five Year Plan's target of 8.0 per cent gross domestic product (GDP) growth and the measures announced by Finance Minister Jaswant Singh in the Budget for economic development were steps in the right direction.

He stressed on physical connectivity by way of roads, technology connectivity through use of IT and telecom, knowledge connectivity and financial connectivity in the country.

The President said these were crucial particularly for rural India, where two-thirds of population lived.

Coupled with these, Kalam said establishment of IT-enabled administration was important to enable the country to eradicate poverty and become a developed nation.

PTI