India says that 11 key sectors of its economy, including power, banking and telecommunications, are fully geared up to meet any millennium bug threats.

The head of India's Y2K taskforce, Montek Singh Ahluwalia, told a news conference that critical infrastructure services would make a smooth transition into the new millennium.

"It is safe to assume that we will not experience any problems although it is impossible to offer iron-clad guarantees," Mr Ahluwalia said.

The country's railways, aviation sector, ports, defence, atomic energy and space organisations have all met deadlines to update their computer systems.

However, Mr Ahluwalia said some areas including health, water supply and sewer systems, all state-controlled sectors, needed more attention in the days ahead.

Control room

The taskforce has advised the Indian Government to pay salaries to its millions of employees by 24 December to avoid overburdening the country's banking system.

"We have also asked banks to give account holders statements of their accounts on paper so that they can have tangible proof if they want it," Mr Ahluwalia said.

SR Mittal of the Reserve Bank of India, the central bank, said some banks have been told to stop computer transactions and update ledgers manually.

"We have identified 14 small banks which are not Y2K compliant and have asked them to revert to manual operations," he said.

Officials also announced the setting up of a national control room in the capital, Delhi, which would be connected to all 26 states and major districts around the country.

It would also be in touch with similar centres in other parts of the world.

"As New Zealand and Australia are the first countries to experience the transition into the new millennium, the information received from them would be shared with everyone immediately on receipt," Mr Ahluwalia said.

"We can then use the five-hour time difference to our advantage and tackle and avoid the problem," he said.

The control room would continue to function into the first week of January.

Nuclear worries

According to the BBC's Jyotsna Singh in Delhi, security analysts remain concerned about the safety of India's nuclear installations.

International experts have also voiced concern about a lack of co-ordination between India and Pakistan - both of whom are nuclear powers.

They say nobody has moved to dispel fears that the Y2K bug may accidentally trigger a crisis between them.

The other sector which could encounter problems is the phone service.

The President of the Telecom Industry and Services Association, P K Sandell, says his organisation is wating until the 31 December before reporting on Y2K preparedness.

He says disruption may occur due to incompatibility of at least 15% of non-digital telephone exchanges - mainly in rural areas and small towns.