Committed to a growth rate of 9-10% per annum: Manmohan Singh

Expressing concern over the fragile global economic environment, Prime Minister Manmohan Singh said, it was possible to raise economic growth rate to 9-10% annually on the back of improved physical and social infrastructure. While interacting with a group of editors, he said, "We are committed to a growth rate of 9 to 10 percent per annum. Our savings rate is about 34 to 35 percent of our GDP...with an investment rate of 36 to 37 percent (and) capital output ratio of 4:1, we can manage to have a growth rate of 9 percent".

The Prime Minister (PM), however, said raising economic growth rate to double digits would require strong commitment to improving infrastructure and upgrading education and healthcare facilities. His assertion comes in the wake of the RBI lowering the economic growth projection to 8% for the current fiscal as against 8.5% achieved in 2010-11.

The Prime Minister’s confidence gives support to the planning commission’s expectation, recently, the Planning commission Deputy Chairman Montek Singh Ahluwalia said India is in a strong position to achieve 9-9.5 per cent growth during the 12th Five-Year Plan (2012-17). However, the RBI has downturn the economic growth forecast to 8% for the present financial year.

With reference to economic agenda for the coming nine months Prime Minister 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.' Manmohan Singh also asked opposition to corporate in passing the reform-oriented legislations like Insurance bill, government is looking to increase the FDI limit in insurance sector form existing 26% to 49%.  'We helped BJP to pass first Insurance Bill...we want to raise FDI to 49 percent. We hope, we can still persuade the Opposition to help in this', PM added.

Showing his concern on the international front PM 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.’

On the Middle-East crisis, Manmohan Singh said, “what is happening in the Middle East is of direct concern to us. Apart from the fact that we have 6 million Indians working in the Middle East 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 added.

Giving the example of managing 2008 financial crisis, PM said that India managed to retain a growth rate of 7 percent followed by 8-8.5 percent. We must have the vision, the ability and the determination to prosper even when the world environment is hostile.  On the domestic front, Manmohan Singh said, nature has blessed us (India) with a large common market, if we can put in place the goods and services tax legislation and if we can remove barriers to interstate commerce that itself will create new opportunities internally for accelerating the tempo of growth.