PM Optimistic of 8-9% Growth Rate

Pledging more resources for development of areas like infrastructure and public services, premier Manmohan Singh has said that India will attain an economic growth of at least 7 percent in the current fiscal.

Replying to the motion of thanks in Lok Sabha, Singh said that India’s economy was adversely affected in last one year and growth rate declined to about 7 percent.

“I don’t promise you we won’t be affected by the international conditions, but we will be able to achieve a growth rate of 8-9 percent, even when the world grows at a lower rate,” the prime minister said in his 45-minute address. “This year, we will be able to maintain a growth of 7 percent.”

Elaborating on the reasons of his optimism, he said that India’s savings rate, which determines the money that can be deployed for development projects, was still high at 35 percent of gross domestic product (GDP).

“We cannot spend our way into prosperity. But there is scope to increase the allocations, particularly for infrastructure,” Singh said, hoping finance minister Pranab Mukherjee will address this issue in the upcoming national budget.

In addition, he attempted to allay fears of inflation rising in the wake of pump priming of the economy by way of stimulus packages announced earlier and also of measures that will follow in the ensuing months.

“It (expenditure towards infrastructure) will not add to inflation, but to our economic growth.”

According to the Prime Minister, fiscal deficit had increased sharply but even then India had enough resources to spend on flagship programmes thanks to the average annual growth of 8.6 percent achieved during the past five years.

He also said that his government was deeply committed to the agenda listed in the President’s address, adding flagship programmes will be further strengthened and public delivery system made more transparent.