Prime Minister Manmohan Singh today exuded confidence that the economy will expand by at least seven per cent during 2009-10, saying political support to government's flagship programmes could further growth.
Prime Minister Manmohan Singh today exuded confidence that the economy will expand by at least seven per cent during 2009-10, saying political support to government's flagship programmes could further growth.
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"I cannot promise that international developments (economic slowdown) will not affect India, but we can still achieve 8-9 per cent growth rate," Singh said while winding up a debate on Motion of Thanks on President Pratibha Patil's address to the joint sitting of Parliament last week.
"This year we will maintain at least seven per cent growth rate. In the short-run, we cannot do better but this is also good enough," he said.
The growth projections by Singh come within days of caution voiced by the President in her address that the economy could slow down further.
GDP had recorded a growth of 6.7 per cent in the last fiscal, mainly due to dip in investments following the global financial crisis. "Since our savings rate is as high as 35 per cent...if all of us work together, we can achieve a growth rate of 8 to 9 per cent, even if the world economy does not improve," Singh said.
Asserting that the mandate in the last general elections was for inclusive growth, he said although the fiscal deficit in the recent past has shot up, there was enough scope for increasing public expenditure especially on infrastructure projects.
The high growth in the first four years of the previous UPA government, Singh said, benefited the country in terms of revenue generation allowing the government to increase fund allocations for the flagship programmes.
Noting that fiscal deficit has increased in the recent years, the Prime Minister said, "I do believe that in the short run... we have manoeuvrability to spend more resources on our flagship programmes."
Singh said Finance Minister Pranab Mukherjee will unfold government's strategy to increase investment in flagship programmes in the budget to be presented in the Lok Sabha during the first week of July.
"In the present situation, there is considerable scope to increase public expenditure particularly on infrastructure projects and that would not lead to inflation", he said, adding that more investments in infrastructure sector "is the right way to deal with the effects of slowdown."
The economic growth rate, as per the Reserve Bank projections, is likely to further moderate to 6 per cent during the current financial year.
President Patil too, in her address, said that "the current financial year is expected to see a slowing down of growth on account of the global recession."
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