He, however, warned that the big projects which were depending on the funds from the multilateral agencies will suffer. "This (sanctions) should give us strength not to rely on aid in the next century." In order to face the sanctions, he suggested that the Government can raise additional resources by expanding the tax base and increase exports. "The exact effect of sanctions is very difficult to assess," he said. The former revenue secretary was speaking at the Indian Merchants Chamber (IMC) on ``Positioning India in the 21st century - a global perspective''. Referring to the action of the World Bank in postponing decision on loans for road projects, Sivaraman said World bank has been a source of foreign exchange, but the net disbursal has not been `high'.

On thecapital account convertibility, he said that the IMF has modified its stand on the the time frame for India to attain CAC. "India can take its own time and strengthen its economic parameters before going in for the CAC."

Earlier, in his address, Sivaraman said it was time for India to break from the somnolence of the last 5,000 years as the 21st century would be dominated by the aggressive and the dynamic. "We have to throw away shackles of protection... no other country even in Africa is asking for protection to the local industry," he said. "By the world standards, India is still a closed economy,'' he stated.

On the demands among Indian exporters for depreciating the value of the rupee to gain competitive advantage in global markets, he said the gain for exports by depreciating currency is only a temporary solution. "But the loss in terms of the value of the wealth of the whole nation in terms of foreign currency is permanent," he warned.

The Indian currency, which was as low as Rs 7.81 to a dollarin 1980/81, is now around Rs 42 a dollar, a depreciation of 500 per cent, he said. "This is the reason why our rate of growth of 5.5 per cent per annum in the last 18 years is not reflected in our per capita income in terms of dollars and we still get linked with low income countries," said he.

"The lesson that India can learn from the experience of the countries around us, including China, is that there is a need for productivity increase in all industries," he added. He said the apprehension that the opening up of Indian economy would result in takeovers was `baseless'. "If we expect Indian investors to invest abroad, there is no reason why we should feel shy or afraid of inviting foreign investors to invest in India," he said. Leading bankers and businessmen in the US have clearly revealed their growing interest in India, he added.