In January, the government had increased import tariffs to regulate gold imports especially at a time when the prices of the precious metal have been falling.

"When it (gold imports) was going down in the first few months of this year, then people were saying it was going down because of an increase in duty that I had brought about," Sinha said adding "you cannot prevent gold imports".

Talking to reporters here after releasing a SIDBI report on small scale industries sector - 1999, Sinha refused to comment on the weakening in the value of the rupee. "Earier, I have been misunderstood on my comments on rupee. I can only say that the Reserve Bank of India has the job of watching the foreign exchange market and it isdoing a good job so far".

Earlier releasing the SIDBI report, he said the small scale sector should realise that protection and promotion can go on only for a limited period if the sector has to emerge self-reliant. "The earlier the sector realises that reservations cannot continue for long, the better," he added. For a resilient small scale sector, Sinha suggested formulation of new financial instruments and products, besides appropriate support services.

Also, emphasising on quality and cost effectiveness within the sector, the finance minister said small scale units could penetrate in world markets. The sector already exports 35 per cent of India's total exports. He urged the lenders to this sector to provide not only finance but also timely counselling, market intelligence and infrastructure for improving the operational efficiency of the SSIs.

Complimenting the SSIs for showing consistent growth higher than the rest of the industrial sector, Sinha said the questions of ancillarisation,mechanisation and rationalisation of excise duties need to be addressed. He suggested that the definition of a small scale sector unit needs to take into account not merely its turnover but also manpower employed.

The definition should also take into consideration whether the unit is in the service sector. Quoting the SIDBI report, Sinha said the sector is expected to generate one million jobs even while clocking an export growth of 8-8.5 per cent in 1999-2000.