An optimistic Prime Minister Manmohan Singh on Friday said that although government red-tape, procedural delays and political differences over reforms were sources of anxiety, there should be no doubt about India’s continued rise as an economic and global power.
“I cannot deny that there remain many challenges and problems and weaknesses in implementation,” Singh told delegates at the Hindustan Times Leadership Summit here.
At the same time, he added: “India will continue to rise and, in doing so, will help everyone rise.”
“Our biggest challenge in trying to sustain this process of inclusive growth has been to bring rates of inflation down and keep the fiscal deficit under control. These remain a challenge and are being seriously addressed,” he said.
“In the past few months, Indian business leaders have been worried. I understand their anxiedties about our red tape, our tax laws and administration, our regulations and procedures,” Singh said.
“I have often found it tough to deal with these challenges because of a lack of political consensus on the reforms that we need to bring in,” the Prime Minister said.
“Yet, I must say, despite all these problems, Indian business and enterprise has demonstrated its ability to cope with competition,” he said.
The Indian economy is currently caught in a potent mix of a dipping investment, high borrowing costs and rising prices.
India’s economy grew 4.8% during July-September, marginally higher than the previous three months’ 4.4% growth, aided by a sharp rebound of the farm sector at 4.6%, but a jump back in factory output, which barely crawled at 1%, remains critical to spin jobs and multiply income.
The second quarter estimates of India’s gross domestic product (GDP)— the broadest measure of value of all goods and services produced in the country— show that India’s economy will have to expand at an average of 5.6% during October-March to grow at 5%-- much lower than the average growth rate of more than 8% India clocked during 2004-08.
“Naturally, there will be periodic ups and downs,” Singh said. “The economic cycle presents us years of high performance and years of modest performance. But the highs are getting higher and so are the lows. Today, many feel dissatisfied with an annual rate of growth of 5%, while more than two decades ago, 5% was the target rate of growth of our five year plans.”
Singh urged the media and other observers to focus on the “big picture” of India where “economic growth, social change and political empowerment” have spawned aspirations for millions of Indians.
This has driven expectations for faster growth and better quality of life.
“Once in a while, public anger may spill over onto our streets and into the media, but India’s silent majority exercises its franchise in legitimate democratic ways to secure change,” he said.
The “inclusive growth” strategy, the Prime Minister said, was centred on six key pillars: better rural infrastructure, increased public investment in education and health, livelihood and energy security, enhancing skills and support for small firms and greater investment in public transport.
As finance minister in his now famous 1991-budget speech that set the stage for economic reforms in India, Singh had quoted said that the emergence of India as an economic powerhouse was an idea, whose time had come.
“Over the past two decades, this idea has shaped our relations with the world, with all major powers, with our Asian neighbours and across the Indian sub-continent,” he said.
Striking a philosophical note, Singh said: “For the short period we mortals occupy the places we do, let us strive to do our best, for India, for the world, for humanity.”
“India is on the move. Indians are on the move. As India rises, there are challenges to deal with,” he said.
“Our real challenges are at home and ups and downs are part of life. We all know that. But we have never allowed ourselves to be overwhelmed by twists and turns in our lives. We have never allowed these challenges to weaken our faith in ourselves, in our democracy, in the principles that define our democracy and in India’s destiny,” he said.