Economy Likely to Grow by 8.5%: PM

Prime Minister Manmohan Singh has said that the economy is likely to grow by 8.5% during this fiscal with country being capable of attaining 10% expansion on the medium term, said media reports.

The year 2009-10 registered a growth of 7.2% in the aftermath of the global economic crisis.

“We need a rapidly growing economy to generate productive employment and also resources to finance our ambitious social and economic agenda,” Singh was quoted as saying while addressing a press conference.

In 2008-09 at the height of economic downturn, the growth had slipped to 6.5%.

“Our medium term target is to achieve a growth rate of 10 per cent per annum. I am convinced that given our savings and investment rates, this is an achievable target,” the prime minister was quoted as saying.

India has savings and investment rate of 35% of the GDP, next only to China’s 49%.

“However, its (high growth) achievement will require determined efforts to increase investment in social and economic infrastructure, enhance productivity in agriculture and give a fresh impetus to the manufacturing sector,” he was quoted as saying.

“Our annual rate had averaged 9 per cent for four years before the crisis. It reduced to 6.5 per cent in 2008-09, but recovered to 7.2 per cent in 2009-10. We expect 8.5 per cent growth in this financial year,” he was quoted as saying.

Singh noted that the first concern in the wake of the financial crisis was to protect the economy from the global slowdown, reports said.

In the budget for 2010-11, the government partially withdrew the stimulus, saying economic recovery was strong.

“The record of our first year is a record of reasonable achievement,” he was quoted as saying.

(Based on internet reports)