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Finance Minister P Chidambaram Tuesday said the economy needs more reforms to come out of the impasse of slowing growth and high current account deficit. He listed a 10-point agenda for growth which he said needed bipartisan support. But he came in for sharp criticism from BJP leader Yashwant Sinha, who claimed the UPA government was playing with the economy.

The minister also said the government’s handling of the economy from 2009 to 2011 was partly responsible for the steep fall in the value of the Indian currency since January this year.

"We allowed the fiscal deficit to be breached and we allowed current account deficit to swell because of certain decisions that we took during the period," the finance minister told the Lok Sabha.

President Pranab Mukherjee was the finance minister during this period and policy decisions taken at that time to help the economy recover from the impact of the global financial meltdown of 2008 included a sustained rise in government expenditure.

Chidambaram said domestic factors such as these accentuated the 20 per cent fall in the value of the rupee since January. "There are not just external factors, there are also domestic factors. We recognise that there are domestic factors," he said.

The rupee breached a new low of 66.30 against the US dollar in intra-day trade Tuesday. But Chidambaram reiterated the government would contain the current account deficit at $70 billion and said all options to finance it were being considered.

Significantly, the minister in his reply to a short duration discussion on the economy did not rule out the possibility of issuing sovereign bonds. "I cannot open a debate on sovereign bonds. All options are on the table, the government will take a call," he said.

The minister, who was speaking a day after the Lok Sabha passed the Food Security Bill - whose humungous cost sparked concerns among investors about its impact on government finances - was equally firm that the fiscal deficit would be kept in check at the budget target of 4.8 per cent of the GDP. "There will be some pain but it will make us stronger," he said.

Other than keeping a check on deficits, Chidambaram’s agenda for reforms include accretion to forex reserves, revival of the investment cycle, pushing through the capex programme of public sector firms and capital infusion in public sector banks.

He also underlined the need to reap the benefit of the good monsoon, encourage manufacturing and exports as well as resolve the impasse in the coal and iron ore sector to encourage domestic production and exports. "India cannot afford to grow at less than 8 percent per year and needs more reforms to revive growth," he said.

But former finance minister Yashwant Sinha said the government was deliberately playing with the economy for five years now and the entire country was suffering as a result. "The government has lost control over the economy. So it is better that it goes," Sinha said.