Promising a renewed focus on infrastructure that will need $1 trillion in investment during 2012-17, Prime Minister Manmohan Singh Tuesday said India will grow at 8.5 percent next fiscal, accelerating to 10 percent in the medium term.
“Despite adverse global situation, the Indian economy grew by 6.7 percent during fiscal 2008-09, which will accelerate to 7.2 percent this fiscal that ends in a few days time,” the prime minister told a conference organised by the Planning Commission.
“We expect a growth of 8.5 percent in 2010-11 and I do hope we can achieve 9 percent in 2011-12,” he said, adding: “But we need to do even better. A 10 percent per annum target is what we should work towards.”
Manmohan Singh, who is also the chairman of Planning Commission, said while a double-digit growth looked ambitious, it was not impossible and was something that had indeed been achieved by some emerging economies.
“For this we will make continued improvements in our policy regime and procedures,” the prime minister told the conference, primarily to deliberate on Building Infrastructure: Challenges and Opportunities.
Finance Minister Pranab Mukherjee, Agriculture Minister Sharad Pawar, Road Transport and Highways Minister Kamal Nath, Power Minister Sushil Kumar Shinde and Planning Commission Deputy Chairman were among those who attended the conference.
According to the prime minister, in the next Five Year Plan (2012-17), India will need double the investment of $500 billion that will go into infrastructure development in current plan period.
"Preliminary exercises suggest investment in infrastructure will have to expand to $1 trillion in the 12th Five Year Plan. I urge the Finance Ministry and the Planning Commission to draw up a plan of action for achieving this level of investment."
He emphasised that a successful infrastructure development strategy depended crucially and critically on implementation, and the the federal and state governments needed to give top priority to strengthen the capabilities.
The prime minister also outlined some of the programmes on infrastructure currently under development:
- In electricity, the problem of high transmission and distribution losses was being tackled through accelerated power development and reform programme
- In roads, work was on to strengthen capacity with changes made in policy for greater private participation
- For railroad, there was a focus on dedicated corridors for both freight and passenger trains, apart from metro rail projects being increasingly pursued in many cities
- In aviation, the Delhi and Mumbai airports are undergoing a complete transformation, airports the at Hyderabad and Bangalore have already been operationalised, while the upgrade process will start for Kolkata and Chennai.
"While these efforts will have to be primarily in the public sector, there may be merit in bringing in public-private partnership in these areas as well. We need to work on public-private partnership models in these sectors."