These were the views expressed by Montek Singh Ahluwalia, member of India's Planning Commission, while delivering the DR Gadgil memorial lecture in Mumbai on Tuesday. He added that the Indian tariff levels were much higher than most other developing countries and were expected to go down.

``There is also an urgent need to lower fiscal deficit so as to have a lower interest rates regime,'' he said, ading that the rupee is not yet ready for capital account convertibility. ``We have to first rope in our gross fiscal deficit to less than 3 per cent of GDP and also require a very strong banking system. These were some of the prerequisites laid down by the Tarapore committee on capital account convertibility and to date neither of them has been met,'' Ahluwalia said.

``However, as a first step, Indian firms should be allowed a greater degree of freedom as regards their plans to invest abroad or to acquire companies overseas,'' he said. ``On the disinvestment front, the Government is seriously considering roping in strategic partners into the public sector undertakings and handing over the management to private owners, as against simply selling its equity stake,'' Ahluwalia added.