In an informal chat with reporters, the Congress parliamentary party leader in the Rajya Sabha, who was here in connection with the sitting of the parliamentary sub-committee on state funding of elections, said as of now his party was not involved in any effort to form the government since there was a government in Delhi.

The current instability at the centre was due to wrangling among coalition partners, Singh said in reply to a question.

He said political instability was breeding economic instability and only a strong and purposeful government at the centre could stem the economic slidedown.

Singh denied reports of a cold war between Congress president Sonia Gandhi and Congress Lok Sabha leader Sharad Pawar.

Asked to comment on the recent transfer of top-level officials in Delhi,the former finance minister said the main constituents of the ruling coalition, namely the BJP and the Aiadmk, were making conflicting statements on the issue.

Asked whether the sanctions imposed by the US and some other countries in the wake of the Pokhran nuclear tests were hurting the economy, he said, "The government says there is no effect. The sanctions are a factor in affecting investor confidence. We will have to wait till the end of the year to see the actual effect."

Stating that the economy was not in good shape, Singh said export and production figures had gone down and the revenue expectations of the government were unrelated to the ground situation. Customs-duty collections were stagnant and excise-duty figures had registered only a marginal increase, he added.

He said inflation had gone up in the last few months and the rise in the prices of essential commodities had affected the common man. The government's action were marked by confusion, as evidenced by the debate on swadeshi andcalibrated globalisation.

Singh said neither the domestic industry nor foreign investors seemed to be happy over the budgetary steps.

Asked whether the recession in the global markets was having an added effect on the country's economy, he said external problems had superimposed themselves on the economy's internal problems. This called for a redoubling of government initiatives on the economic front, he added.

Advocating a broad consensus on economic issues, he said sound fiscal management was necessary to tide over the present financial crisis. The government should take steps to commence a downward trend on interest rates, revive investment climate and enhance rates of return of government investment in public-sector undertakings.

He said the government should also ensure proper functioning of the social safety nets to ensure that workers were not affected due to adverse changes in the economy.