The decision taken by the Government on these received praise as well as criticism. While the Government was praised for moving ahead, others felt that the decisions were half-hearted and would not achieve much. Take the issue of rupee fall. The rupee fell to a record low, but the measures to stem the slide were criticised for decreasing the liquidity in the market. The rupee touched new record low of Rs 43.45/46 against the US dollar. The forex markets were nervous because of combination of factors like political uncertainties at the Centre and a fresh meltdown in Asian currencies after Russia's de facto devaluation of the rouble, dealerssaid.

The Reserve Bank of India responded by sucking up Rs 5000 crore from the system so that the speculators did not have much to hammer the rupee with.The rupee rallied further against the US dollar and ended sharply higher at 42.56/58 on renewed dollar sales by banks and corporates, thanks to the liquidity-tightening measures initiated by the central bank to arrest the recent slide in the value of the Indian currency.

Sucking out liquidity from the system and heralding a high interest rate regime, the central bank has hiked the cash reserve ratio (CRR) on banks' net time and demand liabilities by one percentage point to 11 per cent with effect from August 29, raised the repo rate (interest rate on securities repurchased) by three percentages points to 8 per cent, allowed 15 per cent forward cover on FIIs' exposure in equities and withdrawn the facility of re-booking the cancelled forward contracts in respect of imports.

While the industry welcomed these measures, it was worried about the effect ofdecreased liquidity and high interest rates.

The BJP government also issued the counter-guarantee for foreign debt to the 1040 MW thermal power project in Visakhapatanam promoted by Hinduja National Power Corporation and UK's National Power Corporation. This is the third fast-track power project for which the BJP government has issued counter-guarantee and covers a foreign debt of $ 818 million in the $ 1.2 billion project.

The other two counter-guarantees signed by the Finance Ministry were for the 1084 MW project of Ispat group at Bhadravati in Maharashtra and a 250 MW project in Tamil Nadu.

While the Government has given momentum to projects which were hanging fire for many years, many issues still need to be sorted out before financial closure is achieved. The projects have not sorted out issues relating to fuel transport, lending from FIs and clearances from Government departments.

The issue of sugar delicensing was another area where the Government faced flak. The Indian Sugar Mills Association(ISMA) called it a ``non-issue'', another body -- the National Federation of Cooperative Sugar Factories Limited (NFCSF) -- has expressed concern over losing statutory zone concept. They feel that the Government should have looked at the basic problem of viability of the industry.

Subsidy burden
The Government announced increased subsidy on phosphatic and potassic fertilisers placing an extra Rs 1,000 crore subsidy burden on the central exchequer. Along with the increased subsidy the Government has also allowed a free float in prices to be determined by forces of demand and supply.Despite the subsidy announced by the Government the industry expects that the increased cost of production on account of the depreciation of the rupee alone which is in the region of Rs 2,200 per tonne may force the industry to raise prices by anything between Rs 1,200 to Rs 1,500 per tonne. DAP prices which currently are in the region of Rs 8,300 per tonne, may touch Rs 9,300 to Rs 10,000 by November-December when therabi sowing begins and may hurt the consumption pattern said experts.