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India To Achieve 8.5% Growth In Next Fiscal Year: PM

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Prime Minister Manmohan Singh expressed confidence that India's economy would grow by 8.5% during the next fiscal and would accelerate to 9% in the following year from an estimated growth of 7.2% this fiscal.

He said this while inaugurating the conference on "Building Infrastructure : Challenges and Opportunities" hosted by the Planning Commission in New Delhi on Tuesday.

Singh said the economy grew at an average annual rate of around 9% before the global economic meltdown. It slowed down in 2008 due to global crisis that continued into 2009, when it was compounded by a severe drought faced by the country. Despite these adverse circumstances, the economy grew by 6.7% last fiscal.

Looking ahead, the country should aim at accelerating the pace of economic growth to around 10% per annum in the 12th Five Year Plan (2012-17) to generate employment for the youth and remove poverty, Singh said. However, he believed that the country should do even better.

Singh, who is also Chairman of the Planning Commission, said while a double-digit growth looked ambitious, it was not impossible. It had indeed been achieved by other emerging economies in Asia. For this, "We would need continual improvements in our policy regime and in our implementation procedures," he added.

For truly inclusive growth, the country's infrastructure needs should be met with utmost priority. Infrastructure must, therefore, be defined broadly to include highways and roads of all kinds including rural roads, railways, air and water transport, irrigation, electric power, telecommunications, water supply and sewerage system.

The Eleventh Plan had estimated an investment of over Rs.20 lakh crore in infrastructure over the five year period, which was more than double the realized investment during the Tenth Five Year Plan. The Plan also recognized that such a large investment in infrastructure could not be funded from public resources alone, as the government had to allocate large portion of its own resources to critical livelihood support programs and to provide access to eduction and health services that are crucial to ensuring inclusiveness of the growth process.
The government has also initiated an ambitious plan for expansion of the roads, ports, airports and electric power sector through public-private-partnerships.

Effective private-sector participation in infrastructure would require a large mobilization of resources through our financial institutions. The Finance Ministry took several initiatives in this regard. Preliminary exercises suggest that investment in infrastructure will have to expand to $1000 billion in the Twelfth Five Year Plan. Singh urged the Finance Ministry and the Planning Commission to draw up a plan of action for achieving this level of investment.

He said there was also a need to review the approach that should guide our regulatory institutions in different sectors. An Approach Paper on the subject was published by the Planning Commission after extensive consultations with experts and stakeholders. He has asked the Commission to prepare a draft bill outlining the next stage of regulatory reform. Views of all stakeholders were sought in this very important area.

In conclusion, Singh emphasized that a successful infrastructure development strategy depends crucially and critically on implementation. Both the Centre and the states have to give top priority to strengthen implementation capabilities.

A Cabinet Committee on Infrastructure was set up to monitor progress in this area and urged the Planning Commission to discuss with each of the infrastructure Ministries and come up with agreed targets of achievement for each Ministry, in order to take corrective action as necessary. Like-wise, he requested the states to adopt similar tight monitoring so that the country could achieve the best possible outcome in the remaining two years of the present Eleventh Five Year Plan.

by RTT Staff Writer

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