Adding impetus to the Centre's efforts to usher in a dialogue in Jammu and Kashmir, Chief Minister Mufti Mohammed Sayeed on Thursday termed the appointment of a new interlocutor as a historic opportunity for restoring 'lasting peace with dignity'.

"No body can ignore or shy away from the dialogue process," Sayeed told the state assembly while participating in the four-day debate on the motion of thanks to the governor's address.

He described the new interlocutor N N Vohra as a 'man of immense integrity and high calibre'.

On his first visit to the state on Wednesday, Vohra had held detailed discussions with him and other political leaders, Sayeed said.

While he favoured joint talks by all party leaders with Vohra, individual efforts were also welcome. A dialogue would first have to be undertaken with elected representatives after which others can be involved in the process, the chief minister said.

He hailed Prime Minister Atal Bihari Vajpayee's statement in the Rajya Sabha that past mistakes would not be repeated and also his assurance of support to the state government.

He said the Centre's intention to extend the rail line to Kashmir by August 15, 2007 'is no ordinary commitment, but a pledge to the nation'.

"The sanctioning of Rs 1.68 billion (Rs 168 crore) to upgrade the Srinagar bypass into a four-lane highway as part of the prime minister's national highway project is another indicator of the nation's concern for our needs. The railway is engaging 500 engineers of the state as consultants. Such projects will benefit our people," he told the assembly.

The chief minister said his government would strive to achieve fiscal autonomy, describing it as more important than political autonomy and emphasising that economic reforms are imperative for a self-sustaining economy.

He said he did not believe in rushing to New Delhi with 'a begging bowl', but preferred to prudently manage the state's own resources.

Insisting that the state's fiscal position was not as bad as some believed, he noted that militancy was a major contributor to dwindling revenue.

Sayeed said he had asked the Centre to 'give retrospective effect to the special funding pattern' and waive the state's debt of about Rs 12 billion (Rs 1200 crore).

Though the European Union, the UK and the US had offered help to rebuild infrastructure, Sayeed said 'we are looking at the Centre to bail us out'.

He attributed the relaxed atmosphere in the state and the change in the people's mindset to steps like the merger of the Special Operations Group into the Jammu and Kashmir police, non-implementation of POTA and bringing down human rights violations.

Praising the J&K police for playing a commendable role in tackling the violence in the state, he also made a special mention about its role in checking routine crime like car thefts and bank robberies.