At a time when experts are wondering whether the great Indian growth story is over, Prime Minister Manmohan Singh dismissed the current downtrends as a “temporary setback” and asserted that the country could sustain 8 to 9% growth a year.
Singh, on his way back from a bilateral summit in Moscow on Saturday, also dismissed the latest BJP allegations against home minister P Chidambaram that he helped one of his former clients in a fraud case.
Singh said, “I haven’t had the opportunity to talk to him (Chidambaram). But his statement is there for anybody to see. He said that he is not guilty for the blame being sought to be placed on his shoulder.”
Pointing to the debt crisis in Europe and the overall global situation as the main reasons for the downturn, he said even if the global environment did not improve, “we have the ability and the will to push for a growth rate of at least 8%”. The reason: savings and investment account for 34% and 36.5%, respectively, of India’s GDP.
If investments in infrastructure raise the domestic demand for capital goods, a “growth path of 8% and maybe of 9%” over the next five years can be sustained, Singh argued.
While citing coalition politics as a drag on the reforms front, Singh said his government remained “committed” to reforms and would seek a consensus on foreign direct investment in multi-brand retail after the upcoming state elections in five states.
Uttar Pradesh, Uttarakhand and Punjab are among those that will be going to the polls in the next few months. UP is seen as particularly important because the two major players — the BSP and SP — cannot even consider FDI in retail until the elections are over.