Observing that infrastructure deficit was posing a major constraint to India's growth, Prime Minister Manmohan Singh today said an outlay of over USD one trillion was envisaged for infrastructure projects during the next 5-year plan beginning 2012 and invited Japanese firms to play a greater role in this endeavour.
Singh said his government was determined to continue the economic reforms to create a favourable investment environment and facilitate higher capital inflows and push the reform of both direct and indirect taxes with the aim of unifying indirect taxes into a single Goods and Services Tax in due course.
Addressing a business luncheon attended by top business leaders from India and Japan, he noted that India's growth, which fell to 6.5 per cent in 2008-09 because of the global economic recession, recovered to 7.4 per cent in 2009-10 and is projected to be 8.5 per cent in 2010-11.
He hoped that India will return to 9 per cent growth in 2011-12. "I am confident that strong fundamentals of the Indian economy will enable us to achieve our objective of double-digit growth in the coming decades," Singh said.
Underlining that he was not underestimating "many challenges" that are faced in achieving such high level of growth, he said "we need to close the infrastructure deficit, especially in the power, transport and communication sectors.
"This is a major constraint on our development and we will give high priority to infrastructure development in the years ahead." Singh said that India's investment needs will be at least USD one trillion, part of which will come from within but "we expect Japanese companies to also provide their support."
He said during India's next five-year plan from 2012 to 2017 "we envisage financial outlays of over one trillion US dollars on infrastructure projects." Private investment will play a large role in achieving this target, Singh said, while asking Japanese companies to play a much greater role in development of India's economy.
From India, Mukesh Ambani, Reliance Industries Chairman and Managing Director; Sunil Bharti Mittal, Bharti CMD; Fortis Chairman Malvinder Singh; and HDFC Chairman Deepak Parekh were among those present at the luncheon.