Such a committee would lay down the norms for preparing a model for the states that would enable the legislature and the public to better understand state finances, the RBI said in a statement on Saturday.

This was among the decisions reached at a conference of state finance secretaries here in which finance secretary Vijay Kelkar, secretary (expenditure) EAS Sarma and additional secretary (budget) IS Mathur were present.

A number of measures to be implemented in the direction of state level reforms in fiscal consolidation were pointed out at the conference.It was also decided after a detailed discussion on the proposed government securities act, that the central bank would make available the rationale behind the proposal to enable state legislatures to accord their consent to the act, Thiswould enable Parliament to enact the legislation which would serve to improve the gilts market. Such an act also requires the consent of state governments and passage by Parliament.

The proposed act envisages facilitating electronic trading and depository facility apart from simplification of procedures.

Kelkar, while observing that the Government had already adopted special data dissemination standards of the International Monetary Fund on government finances, announced that the Centre would follow the same practice on the external sector.

Meanwhile, the state finance secretaries present at the meeting noted the contents of a technical paper presented by an internal working group on financial parameters for assessing the financial health of states.They agreed on the formation of a committee which would give an advisory report on appropriate parameters.

The other action points which arose out of the discussion were: The RBI would circulate a technical paper followed by state-wise interaction - as andwhen necessary on the auction procedure for government securities, which will facilitate states' initiatives for market borrowings.

- The central bank will also provide guidance on funds management to states, particularly with respect to investments in treasury bills.

-The RBI would also circulate to states a final draft of the operationalising of the consolidated sinking fund based on discussions at the conference. Earlier, in his welcome address, RBI governor Bimal Jalan insisted on the necessity of bringing about more transparency in the presentation of accounts of the states and Centre.

He however, pointed out that while state government level reforms should continue it was also essential to bring about more transparency in the presentation of accounts of the state and central government and asked the state government to make concerted efforts in this direction.Considering the usefulness of such conference, the state finance secretaries suggested that such conferences might be formalised and heldregularly.