India's new left-leaning government swung into damage-control mode on Friday, reaffirming its commitment to economic reform and strong growth as shares slumped after release of its policy roadmap.

The document 'reaffirms every reform initiative,' Finance Minister Palaniappan Chidambaram told reporters after the communist-backed Congress government announced its blueprint for its five-year mandate on Thursday.

The document, entitled the Common Minimum Programme, pledges to keep Asia's third-largest economy growing at 7 to 8 per cent while focusing on investment in agriculture, India's largest employer, education, power and infrastructure.

"If (the programme) is implemented faithfully, efficiently, effectively over the next five years, our credibility as reformers will be enhanced, not weakened; the economy will be stronger, not weaker; people will be more prosperous, not less prosperous," Chidambaram said.

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His statements came as the stock market slumped by 223 points (4.41 per cent) to close below the psychologically important 5,000 level at 4,835 on investor worries over the fate of reforms championed by the previous National Democratic Alliance coalition.

"Investors are in exit mode," said Anish Marfatia, assistant vice president at Asit C Mehta Investments. "Selling is across the board and the trigger is the government policy slant which is left turned."

The previous government was unexpectedly thrashed by Congress and its allies in elections this month in what was seen as revenge by India's millions of poorer voters, mainly in rural areas, who felt left out of the nation's economic boom.

The economy logged 10.4 per cent third-quarter growth, faster even than China's during the same period, thanks to a bountiful monsoon that boosted demand in the agriculture-dependent nation.

Chidambaram reiterated India was committed to reforms but with a 'human face' and would keep out the 'welcome mat' for foreign investors, saying the country could absorb $10-15 billion of foreign direct investment annually.

"There's so much headroom for foreign investment," said Chidambaram, known as a reformer when he served earlier as finance minister in the mid-1990s.

He added energy-hungry India would have ample need for private players to improve its woefully inadequate power system.

He also said the government was committed to widening the tax net to boost revenues to help cover higher spending as well as to fiscal consolidation.

"Growth cannot take place at seven to eight percent unless you bring in fiscal consolidation," he said.

He reiterated the government would not allow the sale of profit-making state-owned companies but said they would have 'full managerial and commercial autonomy' and the right to raise funds in the capital markets.

Analysts have worried that without privatisation revenues, it will be tougher to control the budget deficit especially with the government planning to make 'massive' public investments.

Good monsoon to boost growth to 8%

Asserting that the Common Minimum Programme provided for bold reform initiatives, Chidambaram said the economy could record over 8.0 per cent growth with good monsoons in 2004-05.

"The CMP has kept the growth at 7-8 per cent on a sustainable manner, if possible more. If we are lucky with monsoon, we can have over 8.0 per cent in 2004-05," Chidambaram said at a press conference here.

India was already the fourth or third largest economy in terms of purchasing power parity, he said, adding, "We will do everything possible to keep the economy on the growth path. Once, growth ticks in 7-8 per cent, we will become stronger."

-- AFP