Inaugurating the `Presidential summit: national conference of the leaders of chambers of commerce and associations' organised by the Federation of Indian Chambers of Commerce & Industry (Ficci) here on Saturday, Sinha also hinted at reorienting the disinvestment programme by utilising the proceeds for retiring old debts.

Regarding foreign investment, he said entrepreneurs would only be required to file application with the Reserve Bank for statistical purposes.

He felt the best way to deal with FDI "is to get out of the decision-making process." He said: "We will bring more items into the automatic route and discontinue with the approval regime. There will be clearly defined and transparent policies. There will also be a negative list indicating the areas where foreign investment will not beallowed."

The minister pointed out that the Foreign Investment Implementation Authority would help the entrepreneurs in solving the post-approval problems. The authority will have representatives from different ministries and state governments. Sinha expressed concern about India's fiscal deficit and said he was determined to keep it under check. "I am worried about it...I am worrying about it," he said.

India has set a fiscal deficit target of 4 per cent of gross domestic product for 1999/2000 (April-March), down from 4.5 per cent in the previous year. Analysts have expressed doubt the target will be met because of unexpected expenses incurred in driving out armed intruders from Kashmir and in holding mid-term elections.

Government data showed the fiscal deficit was already running at 60.2 per cent of the 1999/2000 target at end-August.

"We have to remember that of around Rs 1,600 billion we collect through revenue, about Rs 900 billion go towards interest on loans taken in the past. We cannot affordto live on borrowed money year after year, decade after decade," said Sinha.

He said by keeping the fiscal deficit under check, the Government would create the necessary conditions for the central bank to lower interest rates.

Sinha has also defended the decision of the Government to increase the price of diesel by stating, "It was inevitable and in the long-term interest of the general public."

"Otherwise", the minister said, "escalating fiscal deficit on account on subsidising petroleum products will have a deleterious impact on the future generation."

The minister also felt that efforts should be made to explain the rationale of this difficult decision to the people to take them along with the reform process.

"Containing fiscal deficit is the constitutional and moral responsibility of the finance minister. I am worried about it, but the question is how many people in the country do understand the consequences of increasing fiscal deficit," he added.

On disinvestment, Sinha said its objectivewas not to "fill the coffers." He said it has to be calibrated in such a way that "an old asset sold becomes a new asset, or the proceeds are used for retiring old debts."

The minister admitted disinvestment was a slow starter in India, and the Government was able to realise minimal resources on this count. "In order to deploy the proceeds from disinvestment in growth activities, the mobilisation should be much higher probably to the tune of Rs 20,000-25,000 crore," he added.

Sinha stressed that only with larger resources from disinvestment, a holistic public-sector reform would be carried out. At present, the resources generated from disinvestment are being used for meeting revenue expenditure.

On interest rates, he said it was totally within the domain of the central bank. The finance minister's comments on interest rates are significant as the busy-season credit policy is just a week away and industry has been clamouring for a cut in the rates.

Sinha pointed out difficulties in achieving the lowerinterest regime as long as the Government continues to borrow at high rates from the market. The Government will, however, try and improve the financial environment by limiting the size of the borrowing at the budgeted level, he added.

Reverting to his pet theme, Sinha said the ensuing national competition policy would remove all impediments in the way of free and fair competition within the domestic industry and at the international level. "India must become an extremely competitive society," he said.

The Government, the minister added, was preparing itself in a big way for the forthcoming Seattle meeting of the World Trade Organisation. Sinha said India would not only promote its own cause but would also take up the interests of developing countries at the November meeting.

Responding to industry demand to cut subsidies, the finance minister said subsidy was inevitable for the poorer sections.