What is new in this year's Economic Survey? We have tried to define some problems internally. We decided to focus on a few issues, one of them was the fiscal situation, which has many dimensions. And issues like the problem of industrial slowdown and recovery. We also touched upon state fiscal issues and policies, even though we don't have direct influence over state governments.

What lessons have the finance ministry and economists drawn from previous Surveys?
In the earlier surveys you won't find any section with the heading `privatisation'. We have taken every issue as it is. Judge the words we've used. We have judged each issue more explicitly. The Survey's job is not to solve problems. For example, on issues like downsizing government, different people say different things, but we have dealt with it from our own perspective.

What signal does the Survey have for the Budget? The Survey is not explicitly related to the Budget...it is an article of faith, we've said things frankly. It cannot have any link to the Budget. The Survey refers to the Fiscal Responsibility Bill. Does it mean that the finance ministry would like to adhere to its discipline with effect from April 2001, as stated in the draft Bill?
If I am not mistaken, the finance minister said last year explicitly that he would like to start implementing it from next year without waiting for the Bill to be passed. I think he made the statement about five months ago. Whether it still applies or not we will find out in the Budget.

The Survey says that the lack of public investment has also slowed down private investment in the economy. Does this mean you agree with the school of thought which thinks that public investment drives growth?
Well, I don't think there's enunciation of a general policy here-I think it is referring to specific cases. Clearly, there is a certain amount of complementarity between public goods for basic infrastructure and other types of infrastructure. In the power sector, investment is not taking place, both for private and public.For example, pricing issues will affect both. Take it more as specific examples, not a philosophical statement.
The Survey advocates a reduction in PF and interest rates.
The base should be market-related in some sense.

The Survey refers to the "scars" of the Asian economic crisis and draws attention to the debt servicing cost of Resurgent India Bonds and India Millennium Deposit? Is this a problem?
The scars we are referring to is with reference to the 1991 crisis. However, the external situation is alright. Look at external debt, it is going down, external commercial borrowings are under control. But we will, however, continue to be cautious.

Are you cautioning the government against more scars?
Stating it as a matter of fact, the concern remains but there is no serious problem. The debt-GDP ratio has gone down.

Is the recent increase in inflation cost-driven or demand-led?
The analysis focuses on cost side factors, because it is clear that the most important contributing factor is the increase in fuel prices. This is coming from outside. The charts, however, show that the rate of inflation has been on an upward trajectory since 1995. Surely there are other factors at work?I would say that this has stabilised, there is a small probability of it going up. It will get levelled off. There is no big jump. The effect of changes in international prices on domestic prices, with the removal of quantitative restrictions suggests that manufactured goods prices are unlikely to increase very much. The real concern is in the non-tradable sector. In the tradable sector, trade acts as a dampener on inflation. However, in infrastructure there is a problem. Here the effect will depend on domestic infrastructure situation.

Foodgrain production is down this year, to below 200 million tonne. Will this exert an inflationary impact?
Personally, I can't see that happening. We are sitting on mountains of foodstocks, so there is no serious problem on the food side. The conventional indicators here are not worrying. There is no explicit reference to the "new economy", the IT sector, in the Survey. Why?Software has been covered in the section on industry. However, the Survey is based on data published by the Central Statistical Organisation (CSO), as you know. Only NASSCOM's data is available. We cannot do a full scale analysis of this sector based on the available data. CSO should be collecting this data and giving us something.

Which means as far as the Survey is concerned the e-economy does not exist?
As for official statistics, we do not have sub-aggregates. How they are accounted for and so on has to be asked to the CSO. I expect the Rangarajan Committee will definitely look into the matter and make suggestions. You had predicted last year that India will register 7.0 per cent growth and may even overtake China? But China is at 8.0 per cent this year and we are down at 6.0 per cent. What happened?My prediction was for the decade as a whole! We may still do it, as the Survey says, if critical gaps in the reforms process are addressed. I am not sure that China can sustain 8.0 per cent over the decade. It has already downscaled its growth figure for this year.
Despite service sector being the largest contributor to growth in this decade, the Survey suggests a tax on the sector. Why? There are a number of reasonings, but the prime motivation comes from from value added taxes (VAT). VAT has to be a goods and services tax. If you leave out certain sections of industry or services, then you face evasion and other complications. In the long-term, if you want VAT, it just follows that you have to tax services.

As pointed out in the Survey, is long-term debt the key problem related to infrastructure?
There are various problems, but my personal perspective is that it is a key in some infrastructure sectors, not all. The real issue is a policy problem. Generally, tight controls and the policy and regulatory framework for investment is most critical.

Finally, do you think we are stuck at a 6 per cent growth rate?
Well, the real issue is how much you can go above it. For that we need the reforms the Survey advocates.