The finance minister said this while addressing the central board of the Reserve Bank of India here on Saturday.

Stating that the "thrust should be on export growth," the finance minister said that the export-import policy to be announced on April 15 by the commerce ministry would try to eliminate the impediments to the export efforts.

The exports, it may be recalled, have remained subdued throughout 1997-98 and during April-February increased only marginally by 2.63 per cent, which was lower than the growth of 5.61 per cent recorded during the corresponding period of the previous financial year. Low export growth has also pushed up the trade deficit, which was $6.4 billion at the end of February 1998.

Reserve Bank governor Bimal Jalan, too, in his welcome address,expressed concern over the deceleration in exports and underlined the need for augmenting the export efforts.

The members of the RBI board expressed concern over the subdued state of the capital market and urged the minister to take steps for its revival. They also called for special efforts to ensure a flow of capital to infrastructure like power and housing. The minister took note of the suggestions and assured them of positive action.

Referring to the external sector, Sinha expressed satisfaction over the orderly conditions in the foreign exchange market. He also applauded the RBI efforts for ensuring stability in the exchange market.

The RBI, it may be mentioned, took some hard decisions to isolate the Indian foreign exchange market from the currency turmoil in the south-east Asia. Although some of the decisions, particularly those pertaining to tightening of the monetary policy, drew flak from certain quarters, the exchange rate has remained relatively stable as compared with currencies in certainother countries. Having achieved the aim for a stable exchange regime, the RBI, of late, had started relaxing the monetary controls, which were being reflected in the softening of the interest rates.

Commenting on public borrowing, Sinha assured that "while the borrowing will be high, it will not be such as to crowd out private investment." Total borrowing, including market loans, short-term and long-term borrowings, was pegged at Rs 33,820 crore in the 1997-98 budget. However, it increased substantially to Rs 42,484.41 crore in the revised estimates. In the interim budget, the government proposes to mobilise more than Rs 55,000 crore from the market. This may have its implications on the private sector borrowing, the assurance of the finance minister to the RBI central board notwithstanding.

Sinha also took the opportunity to clarify the stand of the BJP government on the key issue of foreign investment. He reiterated that the "government will encourage foreign investment in line with the national agendaon governance." He further stressed that the government was committed to adopting a transparent regime and removing procedural bottlenecks with regard to foreign investment.

The minister also said that the government would ensure effective internal liberalisation on economic matters in the interest of domestic investors. He took comfort from the fact that the new government's recent policy announcements had been well received by the markets.

Referring to the question of autonomy for the central bank, Sinha said that the government "will like it to function as autonomously as possible as provided for in the charter." The bank, in his view, would have to take responsibility for the areas with which it was entrusted. He also assured that the government would not like to interfere with the day-to-day affairs of the bank.

Jalan, in his address, stated that there were positive signs in the area of money and finance. He added that the inflation rate had been under reasonable control and the general liquidityposition was comfortable.

The governor also assured the minister that the RBI would pursue policies to promote price and financial stability. He further said that growth impulses needed to be activated and infrastructure improved.