quot;GDP growth to slow downquot;

However, he said, given timely implementation of the new economic package by the government, it should be possible to achieve a 6.5 per cent GDP growth in 1999-2000. According to the Assocham chief, the agriculture sector may grow by 2.5 per cent, industry by 7.5 per cent and the service sector by 8.5 per cent in 1999-2000.

According to the forecast exports would continue to be constrained by global recession and the management of fiscal deficit and the external sector would have tobe the watchwords.

The long-term policy issues that need urgent attention of the government, according to Lakshman, include a national policy for agriculture, infrastructure implementation plan with definite timelines, improvement in Centre-state coordination on macro and micro issues and labour markets.

He said the long-term fiscal policy should aim at reduction of fiscal deficit to three per cent, a legislative cap on borrowings by the government, financial discipline on the part of state governments, aggressive privatisation of PSUs, investment in social sector and building political consensus on economic issues.

Referring to constraints, the Assocham chief said the average annual agricultural growth in the nineties was less than half the average annual rate in the eighties. Despite normal monsoon, growth this year is likely to be sluggish at around 1.5 per cent.

Agriculture being a major component of the economy quot;we need badly a national policy. The objective should be to stabilise the performanceof this sector,quot; the Assocham chief said.

With world trade shrinking and the competitive currency advantage enjoyed by the South-East Asian countries, exports are unlikely to improve, Lakshman said.

Another major constraint, he said, was the politics of coalition which had held up many progressive initiatives of the government.