Sinha said on Tuesday at a FICCI-orgainsed seminar -- "A common national economic agenda" -- that there was also a need for broad agreement on various key issues like eliminating revenue deficit, reducing fiscal deficit, better targeting of subsidies, imposing user charges, downsizing Government and improving the quality of governance.

On a suggestion by CPM politburo member Sitaram Yechury that rural rich be taxed, at least to partly recover the subsidy being spent on them, Sinha felt that such a suggestion could be pursued only with political consensus.

The sensitive issue needs to be discussed with states, he said adding, "they can look at this area for shoring up their resources."

The minister also wanted that lands reforms be taken up seriously as it was the root cause for social tensions and violence.

Stating that itwas possible to evolve consensus on broad direction of reform, Sinha said that the foremost issue which needs to be addressed was the growing fiscal deficit of Centre and states. He said,"We can agree on eliminating revenue deficit in the next two to three years and after that the deficit will automatically come down to 2 per cent of the GDP. We can live with the deficit of this magnitude."

Referring to the issue of user charges and subsidies, Sinha said that there was a need for better targeting of subsidies. He felt that subsidies could be clearly defined and given from the budget itself. He lamented, "We try to conceal subsidy" and added that "the habit needs to be given up."

Stating that there was no consensus on privatisation of PSUs, Sinha stressed that, "Unless we take difficult decisions like closing down the PSUs which cannot be run, we will not be able to take up public-sector reforms."

He further added that consensus could be evolved on reforms in banking, insurance and capitalmarkets.

Sinha said that the industry could be given more time for preparing for gearing themselves to facing global competition but it could not be infinite. He said that there was need for the industry to adjust, restructure and prepare for ensuing competition.

The reform of the labour sector, he said, was the most difficult area. "We cannot follow the models developed by others, and will have to evolve our own labour policy," he said.

Speaking on the occasion, former finance minister Pranab Mukherjee said that in order to achieve economic growth of 7 to 8 per cent, it was necessary to ensure that fiscal resources were adequately tapped.

Mukherjee also called upon the political parties not to indulge too much in rhetoric. He said that most state governments were spending much more than what they were earning through tax revenue. "That is perennially putting them into fiscal problem," he said.

He further said that National Development Council and Inter-state Council should have adequate powers totackle many issues that elude consensus. He said that there was no alternative to consensus, "it has to emerge compulsorily on many areas including subsidy, fiscal deficit."

Yechury said that insufficient growth of domestic demand was a major reason which had held back the development. As much as 70 per cent of the people were still outside the purview of the economic reforms.

Yechury said that it was the responsibility of the Government to empower them with positive interventions.