Bakht said the government could consider foreign investment in real estate and the insurance sector, and further simplify exchange controls. Procedures to open branch and liaison offices by foreign companies would be also be simplified.

The performance of the government could be judged from the "comfortable" foreign exchange reserves of US $27 billion and fall in non-performing assets of banks to around 9 per cent. The 5 per cent GDP growth rate which was expected this year was very reasonable in the light of the global recessionary trends.

The policy initiatives undertaken by the government combined with the efforts of the corporate sector would soonachieve a turnaround in industrial growth, he asserted. The current slowdown was due to both internal and external factors. Certain sectors like electricity, cement and leather had, however, recorded positive growth.

Bakht called for reforms in areas of managing large capital flows without excessive volatility, prevention of contagion effect, flexibility for adaptation and innovation in a fast-changing financial system.

Ficci president Sudhir Jalan said the chamber was formulating a common economic agenda in consultation with economists like Rakesh Mohan to ensure policy did not change with successive governments. "This is the first time a chamber of commerce will be addressing issues like education and health," he said about the economic agenda.

The industry body has asked for a sharp 20 per cent reduction in interest rates to make domestic industry more competitive. This would also divert funds from the debt to the equity market and bring down the fiscal deficit, Jalan said.

The chamber has alsoasked for a further cut in direct taxes to bring it in line with East Asian levels which are in the lower band at 25 to 28 per cent. "Although this may not be possible immediately, the budget could make a move in this direction," the chamber said.