Indian economy to reach nine percent within two years: Manmohan Singh

From ANI

Washington, Nov 23 : The Prime Minister, Dr. Manmohan Singh, on Monday boosted the forecast for India's economic growth, saying he expected growth to get back to around nine percent within the next two years.

Addressing the US-India Business Council (USIBC) at a luncheon here, Dr. Singh said: "In today's economically integrated world, economic relationships are the bedrock on which social, cultural and political relationships are built. A strategic relationship that is not underpinned by a strong economic relationship is unlikely to prosper.

On the other hand, a web of economic relationships intensifies both business-to-business and people to people contacts, promoting a deeper and better understanding between countries. That is the kind of relationship we want with the United States."

"Our growth rate has decelerated to 6.7 percent in 2008-09 and will remain at around 6.5 percent in the current year. However, we expect to accelerate from this level and get back to a growth of around nine percent within two years," he added.

The Prime Minister said the extensive enhancement of India's domestic savings rate was one of the primary reasons helping to boost the economy.

"There are a number of reasons why I believe the Indian economy will resume rapid growth despite the fact that slower growth industrialized countries will limit our export possibilities. Our domestic savings rate has increased very substantially and supported an investment rate of 39 percent in 2007-08, most of it being in private investment," Dr.Singh said.

"We have ample human resources in terms of labour skill scientific talent and management capability," he added.

He further highlighted the significance of a vibrant private sector, saying: "Looking ahead, we enjoy a demographic dividend in terms of a growing working age population in a world that is aging rapidly. We have a vibrant and innovative private sector, which operates independently of Government."

He said that India's new and evolving relationship with the United States is in many ways the natural consequence of changes in economic policies and business practices that have occurred as countries have responded to the process of global economic integration.

India's policies also changed in the process making our economy much more open to trade and investment, and more closely integrated with the world economy. These policies have yielded visible benefits for India.

"I am happy to say that American business has been part of India's economic transformation. Most of the large American corporations are now present in India as foreign direct investors. US business in India has also groomed managerial and technical talent which they have liberally used for their global operations," he said.

India's engagement with the US has been expanding on many fronts, throwing up new business opportunities, and "this two-way flow illustrates the mutually beneficial nature of our relationship," he said.

Earlier on November 8, Dr. Singh had said that in the current financial year, India had faced the adverse impact of an inadequate monsoon and the resultant slow down in agriculture.

However, he also observed that India dealt with the global slowdown in a far better way than most countries, and predicted that GDP could accelerate to seven percent next year if the monsoon were normal.

"There are clearly signs of an upturn in the economy. With a normal monsoon next year, we hope to achieve a growth rate of over seven percent," Dr. Singh had said.

"I am happy to say that India has been able to face the global economic downturn better than most other countries in the world. Our strategy, therefore, must aim at sustaining a high rate of growth on the strength of strong domestic demand. We seek to achieve this through a large increase in investment in infrastructure," he added.

Dr. Singh had also pointed out that India's growth had accelerated from 5.6 percent in the 1980s to nine percent in the five-year period preceding the global financial crisis.

"Our strategy today is not just to deliver rapid growth, but to deliver rapid and inclusive growth, a growth that will provide productive employment to our young population and raise living standards in rural areas across the country," he said. By Smita Prakash


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