The revival of economic growth at home, despite continued global concerns about deflation, testifies to the robustness of the Indian economy, said Prime Minister Manmohan Singh in a conversation with newspaper editors in New Delhi on Tuesday.

The prime minister ruled out any hasty steps towards financial sector liberalisation, asking rhetorically what might have happened to India if it had followed the "road maps drawn by Wall Street and the City of London".

Emphasising the importance of industrial development, both for employment generation and poverty reduction, Singh said there is a need to strike a balance between a concern for the environment and the imperatives of industrialisation.

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"There are two Indias, and inequality is a fact of life. It is our duty to bridge this gap," said the Prime Minister, adding, "At the same time, we cannot solve problems by perpetuating poverty in the name of environment."

The prime minister said he would shortly be convening a joint meeting of the ministers for environment and forests, industry, coal, mining, petroleum, roads and other infrastructure to find a solution to the problem of industrialisation and environment protection, "Without going back to the licence-permit Raj which we abandoned in 1991."

In an implicit reference to the Vedanta and Posco issues, Singh said, "If the mineral wealth of the country cannot be exploited, growth of the economy will be affected. We need a balance between environmental concerns, poverty eradication and economic growth."

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In response to questions on rising corruption in government and the threat of 'crony capitalism', the prime minister said he was the first person to draw attention to the problem of 'crony capitalism', as early as in 1992 when he was finance minister.

He assured the media that he would take action whenever cases of corruption are brought to his attention.

Responding to a question on his key concerns, Singh said his first priority was to maintain communal harmony, especially in the context of the expected Supreme Court verdict on the Babri Masjid-Ramjanmabhoomi land case; second, to normalise the situation in Kashmir; and third, to reduce inflation.

While the performance of the economy was okay, his real concerns were about communalism, casteism, extremism and threats to the polity, said Singh.

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Conceding that 'there is no royal road to success' in Kashmir, the prime minister hoped we would still be able to secure the widest possible consensus for the resolution of the issue of Kashmir, and restoration of normalcy in the state of Jammu & Kashmir.

Towards this end, said Singh, he would be convening a meeting of the Cabinet Committee on Security later this week.

Rejecting criticism that his ministerial colleagues spoke in many voices, Singh claimed this was the benefit of being a democracy.

He went on to add that even in Prime Ministers Jawaharlal Nehru and Indira Gandhi's Cabinets there were sharp internal differences that were often publicly articulated.

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"Panditji and Sardar Patel disagreed on many issues and Sardar Patel wrote long letters expressing his views. Indira Gandhi and Morarji Desai disagreed and so did people like Chandra Shekhar, when he was part of Indiraji's Cabinet."

"I cannot ask my colleagues to shut up, but I ensure that government functioning is not affected. Inter-ministerial differences must not result in a paralysis of decision-making," he said.

On the Supreme Court's recent directive to the Union Ministry of Food and Agriculture to dispose of food stocks by giving them free to the poor rather than let them rot, the Prime Minister said the judiciary should not get into the realm of policy formulation. Each arm of the state has its own role to play, he added.

"How can foodgrains be distributed free to an estimated 37 per cent of the population, which lives below the poverty line?" Singh asked.

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"I do recognise that food should be available to people below poverty line at concessional prices. We have not allowed any increase in the issue price of foodgrains to people below the poverty line since 2004," he said.

The Prime Minister said he would be reconstituting his council of ministers before the winter session of Parliament.

"It is now 16 months since we formed the government. I will assess the performance of my ministry and will reshuffle the Cabinet before the next session," he said, adding "I would very much like to reduce the average age of my ministry."

Touching briefly on foreign policy issues, Singh said that the relationship between India and China would be characterised for the foreseeable future by both competition and cooperation.

Singh iterated his commitment to improved relations with all of India's neighbours. On Pakistan, he said "India has to engage with Pakistan regardless of the composition of its government." He hoped Pakistan foreign minister Shah Mahmood Qureishi would visit India soon.