``With only one year left before the start of the 21st Century, it is perhaps an appropriate time to start preparing for a second generation of economic reforms,'' the policy paper says, calling for radical reforms in the areas of infrastructure services, agriculture and factor markets.The call for reforms follows an admission of a drop in the output of six core industries, electricity generation, coal, steel, crude oil, refinery throughput and cement. Between April and December last year, the growth in the combined output of the infrastructure industries decelerated to two per cent, from 4.1 per cent in the first eight months of the last fiscal.

The six core industries, that together have a weight of 26.7 on the index ofindustrial production (IIP), were, however, a silver lining in the dampening climate of industrial growth last year, showing a one per cent uptrend in growth at 4.6 per cent compared to 3.5 per cent the previous year. The winds from south-east Asia, held responsible for the economic slump at home, seem to have left their impact on the infrastructure sector as well.

Last year, the infrastructure sector got a leg-up from fiscal sops like an extension in tax holiday for power plants. Investment in infrastructure was also baited through policy initiatives, like easier foreign investment norms for power generation, roadways, bridges and ports.

The Plan outlay for energy, communication and transport was enlarged. The final bait for infrastructure development came in the form of giant projects, like the National Integrated Highway Project.

The Economic Survey hints that the Centre may now concentrate on market mechanisms for making funds available. ``To mobilise long-term finance, domestic capital markets willhave to be reformed, so as to create a vibrant debt market'', it says.

The Survey recommends that municipal corporations and other urban bodies be allowed to issue bonds to fund their requirements, like infrastructure companies. ``Private financing of infrastructure projects will require a major domestic focus,'' the paper says.

It calls for a greater role of specialised financial institutions, like the Infrastructure Development Finance Company in ensuring a credit enhancement for infrastructure building. It also calls for an institutional and regulatory framework for the infrastructure sectors to ensure fair competition.``The commendable but gargantuan task of decontrol and de-bureaucratisation, which the government in the nineties has set for itself remains unfinished,'' the paper says, adding more categorically that the remaining price and distribution controls must be eliminated. Most of the six core industries that qualify as ``infrastructure sector, like steel and coal have been through the test offire, while power generation and oil production are in the throes of liberalisation.

The Survey shifts some of the onus of unshackling infrastructure industries on the states. It calls for ``state-level reforms'' particularly in ``transport, storage and processing of agricultural goods, reform of infrastructure sectors like electricity, canals and road transport.''With the exception of power generation, which kept up the growth tempo at 6.6 per cent (compared to 5.6 per cent last year), the production of all the other five industries slumped. Coal production was nearly stagnant at 154.7 million tonne in the first eight months of this year.

Steel production fell by 2.6 per cent, after a marginal decline of 0.1 per cent last year. Crude oil production dropped by 3.6 per cent in the first eight months of this fiscal, after growing marginally by 2.7 per cent, the year before. The throughput of the oil refineries showed a mere 3.2 per cent increase this year, compared to 3.5 per cent in the first eight monthsof 1997-98. Cement production went up by 3.7 per cent, compared to a growth of nine per cent in the first eight months of the last fiscal.

The revenue earnings goods traffic of the Railways dropped by 2.5 per cent between April and December, after growing by 6.1 per cent during the same period in 1997. The cargo handling at ports did not grow at all, after posting a 12.4 per cent growth in the first eight months of 1997-98. The growth in telecommunications density, measured by the number of telephone connections provided, grew by 26.1 per cent this year, after a 31.9 per cent rise in the first eight months of the previous fiscal.