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Prime minister Manmohan Singh said raising economic growth rate to double digits would require strong commitment to improving infrastructure and upgrading education and healthcare facilities
New Delhi: Amid fears of slowdown, prime minister Manmohan Singh on Wednesday said it was possible to raise economic growth rate to 9%-10% annually on the back of improved physical and social infrastructure, reports PTI.
“We are committed to a growth rate of 9% to 10% per annum. Our savings rate is about 34% to 35% of our gross domestic product (GDP)... With an investment rate of 36% to 37% (and) capital-output ratio of 4:1, we can manage to have a growth rate of 9%,” he said while interacting with a group of editors here.
The prime minister, however, said raising economic growth rate to double digits would require strong commitment to improving infrastructure and upgrading education and healthcare facilities.
His assurance comes in the wake of the Reserve Bank of India (RBI) lowering the economic growth projection to 8% for the current fiscal as against 8.5% achieved in 2010-11.
Referring to the economic agenda for the next eight to nine months, Mr Singh said, “First, it is to sustain momentum of growth that we have attained. Second is to ensure that infrastructure does well, procurement system must be made more transparent.”
He also sought cooperation from the Opposition in passing the reform-oriented legislations like Insurance Bill that seeks to raise foreign direct investment (FDI) limit to 49% from 26% now.
“We helped Bharatiya Janata Party (BJP) to pass first Insurance Bill... We want to raise FDI to 49%. We hope, we can still persuade the Opposition to help in this,” he said.
Expressing concern on the international front, Mr Singh said, “I think the situation is not that positive. The international global recovery is fragile. Even the US growth rate is faltering.
“In Europe, it is the sovereign debt crisis, the problem of the Greek crisis, and whether the Euro-zone will survive or not. If it will not survive, it will be a major institutional collapse,” he said.
He further said that what was happening in the Middle-East was of direct concern to India. Apart from the fact that six million Indians work there, “nearly 70% of our oil supplies come from the countries of the Gulf and North Africa.
What turn these events will take nobody knows.
“So, (we) have to swim against this adverse tide and therefore India requires all the energy and all the cohesiveness of our polity to swim against these tides and come out victorious,” he said.
Citing the example of handling 2008 financial crisis, Mr Singh said that India managed to retain a growth rate of 7% followed by 8%-8.5%. “We must have the vision, the ability and the determination to prosper even when the world environment is hostile,” he added.
On the domestic front, he said, the country should move ahead with important legislation like the Goods and Services Tax and remove barriers to inter-state commerce.
On the contentious issue of allowing foreign investment in multi-brand retail, the prime minister said, “There is a big debate on this. Small traders have a fear but there is the other side also.”
The industry ministry had earlier come out with a discussion paper making a case for opening multi-brand retail sector to foreign investment. The government has already allowed 100% FDI in wholesale business.