Addressing a national conference on agenda for the new government organised by Federation of Indian Chambers of Commerce and Industry, Sinha said he was not in favour of keeping inflation under control through a tight monetary policy when there is slow down in the economy.

Artificial curbs on inflation would affect the investment both by the public and private sector, he said. Sinha's statement assumes significance in view of the credit policy being announced by the Reserve Bank of India (RBI) next week.

Sinha urged the business associations to evolve a consensus among themselves on vital economic issues. ``All of us should speak one language and we should speak for India.'' Sinha meeting with industry associations on Thursday had exposed sharp differences within the industry on the issue of protection to domestic companies.

Sinha also called for anational consensus on economic policies. ``I am pleading for a consensus. It will enable us to take decisions which you and I cannot take alone.''

At present, everyone was out to fulfill their own agenda, the finance minister stated citing instance of the Fifth Pay Commission which had bend backwards to appease various section of the employees.

Referring to the forthcoming budget for the year 1998-99, Sinha said it was very easy for him to take popular measures. Questioning the logic of presenting such proposals, he wonder if such a budget would be in the national interest.

On cutting down revenue expenditure as suggested by the chambers at their meeting on Thursday, Sinha questioned how he could cut down expenses. ``Should I go back on my commitment to domestic and foreign lenders, can we cut back on defence, should be cut back on subsidies or do we cut down the size of the government?''

The finance minister stated that foreign savings was necessary to complement the domestic savings of 26 per centto achieve growth rate of 7-8 per cent. Sinha pointed out that there was tremendous interest among foreigners in doing business in India. He felt that there was more acceptance of swadeshi in the country now. ``People have realised that indiscriminate liberalisation can do irreparable damage to the country.

Reiterating his commitment to the industry on making government more industry friendly, Sinha said he was taking responsibility to remove inspector raj. He added: ``I want the industry to be free from the government shackles as far as investment is concerned.''

Sinha further felt that liberalisation had to be tempered with regulatory mechanisms.

Economists for hiking taxes

MUMBAI: Leading economists have favoured a higher dose of taxation like imposition of surcharge on income tax, cess on petrol/diesel and raising of user charges for power and water with the twin objective of financing infrastructure and reducing revenue deficit in Budget.

At the customary pre-Budget meeting withfinance minister Yashwant Sinha on Friday, economists suggested that the key priorities for economic policy should be to reinvigorate and accelerate growth of output and employment along with a strong programme of disinvestment and privatisation. As far as revenue measures are concerned, they suggested that apart from raising user charges for electricity and water, suggested a cut in low priority subsidies.