New Delhi: Charting a five-point agenda for financial sector reforms, Government today (Dec 6, 2004) favoured further opening up of the external sector, including easier capital account convertibility, but stressed on financial stability of the country.

Addressing the Indian Economic Summit, Economic Affairs Secretary Rakesh Mohan said revenue collections must improve and public sector must contribute to the nation's savings so that more funds are available for infrastructure financing.

"There is a need to create an efficient financial sector, ensure better price discovery, efficient allocation of resources, foster competition and keep on opening the external sector carefully but with a very strong eye on the financial stability," he said at the summit organised by World Economic Forum and CII (Confederation of Indian Industries) in New Delhi.

After the East Asian crisis of 1997, there was a wide debate on the speed of opening up the economy and degree of capital account convertibility, he said.

"Low income countries like India have to particularly keep a watch on financial stability," he added.

While most emerging countries have suffered from financial instability during the period of opening up of their economy, Mohan said India was the only country, which never faced such instability.

India attained financial stability despite the rapid pace of financial sector reforms, he said, adding this pace of reforms has to be maintained.

He said the public sector has to "turnaround" from being a dis-saver to a saver, which would push the country's savings rate.