Launching a broad side at the Atal Behari Vajpayee government in his address at CII's annual session, Singh said, "Prime minister Vajpayee's points are wishful and vague ". Singh also took the last finance minister P Chidambaram to task. He said that a massive shortfall of Rs 3,000 crore had occurred in tax receipts due to Chidambaram's VDIS scheme.

Singh warned that amnesty schemes and "pump priming" could not bring back the growth momentum.

"In spite of considerable relaxations in the fiscal or monetary policy in the past, the growth rate had only declined," declared Singh.

Singh said that without a comprehensive restructuring exercise by way of controlling subsidies, reduced government spending, widening of the tax base and PSU disinvestment, "high growth would only remain a pipe dream".

Singh warned against pump priming which would be counter productive and lead tostagflation and a dis-equlibrium in the balance of payment situation.

"While I am not opposed to more money in the infrastructure sector, this has to be done in a manner that does not fuel inflation", added Singh.

He expressed concern over the borrowing programme of the government at Rs 86,000 crore which would also increase through additional market borrowing leading to a steep rise in inflation rates and hamper investments. Any policy leading to sharp inflation may lead to short-term gains, but will ultimately be bad in the medium term, he added.

Singh was critical of the fact that the central fiscal deficit was 6.1 per cent and the combined fiscal deficit of the Centre and the states was 8-8.5 per cent. Superimposed on this, the decision of state governments to implement the pay commission recommendations as well as the other schemes would result in an overall fiscal deficit of 9-9.5 per cent and would limit the options of the government, added Singh.

Singh said that the demand for a level playingfield by Indian industry was quite natural, given the lack of a sound financial system, lack of adequate infrastructure, multiple levies & local taxes and the lack of an effective draw back scheme.

Singh said that an effective anti-dumping legislation was necessary to redress the pressure from foreign competition and complaints of dumping. The former finance minister also emphasised on the need to correct anomalies in the import tariff structure.

He however, was of the firm belief that protection was not an answer and said that the unreasonable protection would be counter productive for the BoP situation. Singh emphasised the need to increase India's exports in value terms by 10-15 per cent per annum. Recourse to protectionism would also have an impact on the inflow of FDI and portfolio investment and this would be against the interest of the industry as well as economy and this route should be resisted for short-term gains, he reiterated.

Singh ended by saying that there was no alternative but topersist with reforms and meaningful fiscal restructuring.