It is bad enough that in the decade of reforms, the average rate of growth of GDP at 6.4 per cent was not much higher than the 5.8 per cent achieved in the fiscally irresponsible eighties before reforms. What is even more disquieting, the growth rate has been declining in the last three years. If this is not reversed, the economy might slow down to the current equivalent, namely 5.5 per cent or so, of the Hindu rate of growth of the three decades before the eighties.

The budget does not go far enough in deepening reforms and accelerating growth. It is good that the Centre's fiscal deficit has been contained at the budget target this year and the target for the coming year lowered. Reducing the interest rate on small savings, if it helps lower interest rates, is welcome. But whether the overall fiscal deficit (including the deficit of states and PSUs), which had climbed back to its pre-reform level, would also fall is open to doubt. Unless it does, the public sector's borrowing will crowd out private investment.

Other than a welcome promise to reduce the size of government through attrition, there isn't very much on reducing subsidies or any other major item of expenditure. The revenue proposals did not make any new and radical departures. So, the fiscal adjustment remains intractable.

Fortunately, Sinha has not caved in to the shrill demands for increasing all tariffs to their bound levels and to impose anti-dumping duties. Still, by keeping some agricultural tariffs at their peak levels, raising others and succumbing to the demand for high duties on used cars, he erodes the credibility of his promise to bring tariffs to East Asian levels. Any tinkering with tariffs annually will send wrong signals about India's commitment to reforms.

The fact that India received less foreign direct and portfolio investment ($4.5 billion in 1999) compared to Thailand ($ 8.7 billion) after its financial crisis, let alone China ($42.5 billion), suggests that there are very serious constraints operating in India. Tax concessions are unlikely to offset these. There is no mention of this.

Comprehensive reforms of bankruptcy and labour laws is necessary to attract foreign investment and accelerate industrial growth. But the proposals to set up a National Company Law Tribunal and amend labour laws do not go far enough.

The government hopes to increase revenues from privatisation. But a fundamental examination of the social rationale for each of the PSUs and outright sale of the many for which there is no rationale is needed.

Finally, the minister referred to the action programme of 1996 on power. Given that even its minor component, namely, charging a nominal tariff for electricity to farmers is yet to be implemented, only time will tell whether the other major reforms will happen. Rapid growth cannot be sustained without adequate and reliable supply of power.

In drawing attention to the tasks ahead in deepening reforms, I do not mean to downplay Sinha's political courage in taking on the vested interests, particularly with elections due in many states. Having faced them down, he has to go much farther if the Prime Minister's dream of 9 per cent growth is to be realised.

Prof T.N.Srinivasan is Chairman, Department of Economics, and Samuel C. Park, Jr. Professor of Economics at Yale University. A consultant to the World Bank since 1980, he is the author of Eight Lectures On India's Economic Reforms (Oxford University Press, Delhi. 2000)

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