8.5% growth this year: PM

Prime Minister Manmohan Singh on Saturday said the Indian economy can grow at double-digit rates in the medium term and promised an environment for corporations to expand.

Prime Minister Manmohan Singh on Saturday said the Indian economy can grow at double-digit rates in the medium term and promised an environment for corporations to expand.

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He said appropriate measures were required to deal effectively with the threats of corruption and crony capitalism.

“We were among the few countries that recovered quickly from the after-effects of the global economic crisis,” Singh told delegates at the HT Leadership Summit here.

“Last year we grew at 7.4 %, this year I am confident that the economy will grow at 8.5 %, and next year, we hope to return the economy to a sustained growth of 9-10 %.”

Singh said that with the right kind of investment and regulatory environment, the Indian economy can grow at about 10% on a sustained basis.

“We need a framework which will help us grow at 9-10 % per annum. With material savings and investment rates of 35-37% of GDP, capital-output ratio of 4:1, we can easily sustain 9-10 % per annum and create wealth that can be redistributed,” he said.

There were, however, diverse challenges that need to be addressed.

“A challenge that tests us all the time is that of making our growth process more inclusive, of improving our social and economic infrastructure, of reducing regional imbalances, of increasing the social and economic opportunities for scheduled castes and scheduled tribes, other backward classes, minorities, women and children.”

The Prime Minister said major improvements in infrastructure were required for achieving 9-10% growth.

“We have to work hard to maintain and accelerate growth. We need to invest massively in infrastructure—more and better infrastructure. We need to invest in education and health, in employment generating industrialisation, in more productive and eco-friendly agricultural development,” he said.

“We need to deal effectively with the threats of corruption and crony capitalism,, not only in India, but all over the world,” Singh said. There is also a threat to the environment arising from inadequate regulation.

Singh said the government has dedicated the decade of 2010-20 as a decade of innovation and putting together a roadmap for innovation.