He was speaking at a meeting of all political parties convened by parliamentary affairs minister Madan Lal Khurana in Parliament House to prepare the schedule for the Budget session, which gets underway on February 22.

Responding to queries from leaders of various political parties, Sinha admitted that the country's economic situation was grim. "There are no soft options before us," he told them.

Barring the Congress, CPI (M) and the Trinamool Congress, all parties sent their representatives for the meeting. "Leader of Opposition in Lok Sabha Sharad Pawar had rung me up three days ago to express his inability in attending it, while former finance minister Manmohan Singh sent a letter offering his suggestions," Khurana told reporters after the meeting.

Referring to thedeliberations of the Inter-State Council meeting held on Friday, Sinha said that at least 12 chief ministers had expressed their concern at the spurt in internal borrowing.

"While the situation arising out of foreign borrowing is not so worrisome, it is the internal borrowing which is causing problems, since most of it is spent on maintaining the establishment," Sinha observed. "The situation has become all the more serious after the implementation of the recommendations of the Fifth Pay Commission", he said.