Talking to a group of reporters informally here on Monday, Sinha said fiscal deficit has been causing concern to all governments at the Centre in the past decade. He was, however, not unduly worried for this year's fiscal deficit which, he stressed, would not be allowed to go wide off the mark from the targeted figure of 5.6 per cent.

The Finance Minister said he has been able to save as much as Rs 13000 crore from the Government's non-plan expenditure this fiscal through strict expenditure control. "It is a matter of great satisfaction to me," he said, adding that he personally wrote to all his ministerial colleagues some two months ago to cooperate with him in this regard.

Elaborating further, Sinha said he was exploring various options to reduce the fiscal deficit and some decisions should befirmed up in a fortnight. For example, he said a consortium of FIs were negotiating with PSUs on the question of investing on profit/loss sharing basis. The share buyback formula was also being discussed with the PSUs.

This was over and above the disinvestment in the four blue chip PSUs, including Concor, IOC, VSNL and GAIL. Sinha was sure the disinvestment would take place this fiscal as planned by the Government. As for strategic sale of other PSUs, Sinha said this would have to wait until the next fiscal.

The Finance Minister said fiscal deficit and increased government borrowings have been the biggest bane of any government in the 1990s. Even during 1993-94, the fiscal deficit of the Centre was to the extent of Rs 20,000 crore. Pegging the deficit at seven per cent this year, which he said he would never allow, the figure worked out to Rs 22,000 crore. He, therefore, sought to allay any misplaced apprehensions on this count.

Arguing against the prophets of doom, the finance minister said there wasno cause for alarm so far as economy was concerned. The government had $26 billion of foreign currency reserve. That worked out to seven months worth of imports, the best in the last five years.

Inflation, he said, had dropped to 1.8 percentage point within a short span. This was going to reflect in the consumer price index to be released by the government shortly.

Direct tax receipts, he said, would be in accordance with the target set. There was some problem on the indirect tax front. Even so, the government will try to achieve this as well. He hinted that he would try to rationalise the indirect tax collections in the forthcoming budget.

While the BOP situation was comfortable, the trade deficit was putting pressure on the government. He said the current account deficit may be a little over two per cent of the GDP this year. He said a number of factors were responsible for this situation, including sanctions in the wake of the Pokhran blasts, downgrading etc.

Sinha said the two instruments camehandy to offset significant part of the impact of sanctions -- the RIB (Resurgent India Bond) and remittances from abroad. He stressed that remittances have been very good during the current fiscal year.

The finance minister said the industrial production had started picking up, barring sectors like steel, cement, commercial vehicles, textiles and paper. These sectors will pick up once the infrastructure starts looking up.

He said even the banks were flush with funds. What was lacking, perhaps, according to him, was the "feel good factor" which was inhibiting large scale private investments. This was the reason why FDI has not been very good this year though foreign investors had a lot of confidence in the Indian market.

Replying to a question, Sinha admitted that gold import was rising in the country. But this caused no outgo of resources as most of it was bought from foreign money anyway. Asked if he was considering issuing gold bonds, Sinha said the UTI was working on such a scheme.

Sinha did nothazard a guess if the current political situation was a factor in sluggish economic growth in the country. As for the IRA and Patent bills now lying in Parliament, Sinha said it made no much difference. These bills, he said, would now be passed in the budget session. He admitted, however, that the companies bill should have been passed.