“Price continues to be a matter of deep concern. The government attaches highest priority to containing inflation so that there is no distress to the common man”, he said in his first press conference to mark the completion of one year of the UPA-II government.
The Centre, he said, would closely monitor the situation and “together with the state governments, take all corrective steps to bring down prices and protect the vulnerable sections of society.”
He exuded confidence that with the measures being taken “we can bring inflation down to 5 to 6 per cent by December.”
While food price inflation is ruling around 17 percent now, the general price index had crossed the 10 percent level in February.
The government had relaxed import of essential commodities and imposed ban on export of rice, wheat and pulses, besides restricting sugar exports to check prices.
Singh said that international situation, especially high petroleum prices, coupled with drought and floods at home had fuelled prices.
The UPA-II last month survived cut motions brought against it in Parliament by opposition parties against certain budget proposals that led to hike in prices of fuels and fertilisers.
Attaching high priority to raising investment in social and economic infrastructure and also agriculture, he said despite the pressure, the economy was expected to grow by 8.5 percent in this financial year, up from 7.2 percent and 6.7 percent in the previous two years.
“This is widely regarded as one of the best performances among the larger economies in the world…Our medium target is to achieve a growth rate of 10 per cent per annum. I am convinced that given our savings and investment rate this is an achievable target”, he added.
India’s savings and investment rate is nearly 35 percent of GDP, second only to China’s healthy 49 percent.
To achieve double-digit economic growth, Singh said, fresh impetus would have to be given to manufacturing, agriculture and social and economic infrastructure.
Singh, who is recognised as a world-renowned economist, said that India did not allow global financial crisis to “interrupt” the inclusive growth.
“I leave it to you to judge how well we have done on this count”, said.
On the issue of reservation of jobs in the private sector, Singh said, “We need to create an atmosphere so that trade and industry participants help us on this issue. We are working hard towards that and we acknowledge it needs to be taken forward fast.”
India’s economy to expand by 8.5% in FY’11: PM
Prime Minister Manmohan Singh has said the economy is expected to grow by 8.5 pc this fiscal and the country was capable of achieving 10 pc expansion in the medium term.
The forecast comes on top of an estimated 7.2 percent growth in 2009-10, the year that saw India weather the effects of the global economic crisis.
“We need a rapidly growing economy to generate productive employment and also resources to finance our ambitious social and economic agenda,” Singh said at a national press conference in New Delhi on Monday to mark completion of one year of UPA-II in office.
Growth had slipped to 6.5 percent in 2008-09 at the height of the economic crisis triggered by collapse of financial institutions in the West.
“Our medium term target is to achieve a growth rate of 10 per cent per annum. I am convinced that given our savings and investment rates, this is an achievable target,” Singh, regarded as the architect of India’s financial reforms, said.
India’s savings and investment rate is nearly 35 percent of GDP, next only to China’s 49 percent.
“However, its (high growth) achievement will require determined efforts to increase investment in social and economic infrastructure, enhance productivity in agriculture and give a fresh impetus to the manufacturing sector,” the Prime Minister said.
“Our annual rate had averaged 9 per cent for four years before the crisis. It reduced to 6.5 per cent in 2008-09, but recovered to 7.2 per cent in 2009-10. We expect 8.5 per cent growth in this financial year,” he said, noting that the first concern in the wake of the financial crisis was to protect the economy from the global slowdown.
This had prompted the government to deviate from fiscal prudence by way of stimulus measures (involving high borrowings to step up public spending and foregoing of revenue to boost manufacturing), leading to fiscal deficit shooting to over 6 percent of GDP – a broad measure of a country’s economic wealth.
In the Budget for 2010-11, the government partially withdrew the stimulus, saying economic recovery was strong.
“The record of our first year is a record of reasonable achievement,” Singh said.