"The imperative of fiscal consolidation requires that public finances are managed better. This can take place only through greater collection of revenue and controlling unproductive expenditure," Kalam said, adding Kelkar committee's reports are a road map for creation of a "stable, transparent and efficient tax regime"

In his first address to the joint sitting of Parliament, Kalam said the ambitious eight per cent growth set out in the Tenth Plan was "achievable". It has distinguished itself from the previous plans by underscoring that it is not merely a resources plan, but a reforms plan, he pointed out.

Kalam said the process of divestment has gained irreversible momentum as part of the wider policy of economic reforms.

Stressing the need to control expenditure, Kalam said both the Centre and states need to rationalise their revenue expenditure and to target their subsidies better. The 12^th Finance commission, which has recently been set up, will address these important issues.

Elaborating on divestment, Kalam said state governments are following this policy, which showed that there was "consensus" in practice.

He said the proceeds from divestment reduce the burden of public debt, thereby releasing public resources for social and infrastructure sectors.

During the current year, out of 13 cases of divestment so far, 11 were of loss-making units, he said, adding the procedures for divestment has established "benchmark" norms for transparency, efficiency, administrative simplicity and non-discretionary decision-making.

On the Value Added Tax system coming into being from April one this year, Kalam sought to set at rest apprehensions of the states that they would lose revenue in the initial period, saying the Centre has assured compensation for revenue loss, if any.