Inaugurating a seminar on the mid-term review of the economy organised by the Associated Chambers of Commerce & Industry (Assocham) here on Monday, Jalan said: "In crude statistics, we are better off now. The only difference between now and then is how we view the future. It is important for us to take a realistic view of the future, which is not one of despair but of opportunities.".

Elaborating his point, the RBI chief said that as opposed to the current year, in 1994-95 and 1995-96, inflation, fiscal deficit, and foreign debt were higher, forex reserves lower, and money supply tighter, yet the economy grew at a high rate. Although the parameters have improved and forex reserves are high, industry's confidence seems to be lacking. He added that the key to industrialrevival now was pick-up in investments, especially in the infrastructure sector. "We need industrial revival not only for economic growth, but also to increase revenue. We need investments, especially in infrastructure. Once that gets going, the economy will pick up," he said.

Jalan expressed confidence that the fiscal deficit would be restricted to the targeted 5.6 per cent of the gross domestic product (GDP). There was no reason to doubt the government's commitment on that count, he added.

The RBI governor said that the sources of comparative advantage have shifted in favour of India, and "time is now ripe to use our skills and adaptability to change and shape our destinies, without looking back on the difficult times we have been through". He said: "What is important is no more capital, land or locational advantages, but the skill to adapt and change.". Jalan said the three elements - "death of distance", services revolution and capital not being a constraint on development - would become the basis forfuture growth in India.

The cost of communication and transportation have shrunk drastically in the last few decades, making locational advantage irrelevant to some extent, he said. Likewise, Jalan said the services sector was fast being delinked from manufacturing, and to be efficient in the sector, one did not necessarily need be efficient in production. Citing the example of computers, he said one need not be an efficient producer of computers to be good in software development. On capital, he said, domestic saving was important, but what was more critical was the supplementary capital and technology.

Earlier, in his address, Assocham president L Lakshman said that the government should address problems related to structural weaknesses for achieving a sustainable and high growth rate. Lakshman referred to issues like dismal public-sector performance, rigid labour laws, excessive government debts, infrastructural weaknesses, and financial-sector reforms.

Assocham alternate president KP Singhregretted that despite globalisation, the domestic economic environment was still bottled up in red tape.

He called for a second wave of reforms to free domestic industry from the shackles of archaic laws and procedural hassles.