Indian economy will grow at 7 percent this fiscal: PM


New Delhi : Prime Minister Manmohan Singh Tuesday said India will achieve an economic growth of at least 7 percent this fiscal and promised more resources for areas like infrastructure and public services.

Support TwoCircles

“In last one year our economy was affected and our growth rate declined to about 7 percent,” the prime minister told the Lok Sabha, replying to the motion of thanks on President Pratibha Patil’s address to both houses of parliament.

“I don’t promise you we won’t be affected by the international conditions, but we will be able to achieve a growth rate of 8-9 percent, even when the world grows at a lower rate,” he said in his 45-minute address.

“This year, we will be able to maintain a growth of 7 percent.”

The prime minister said the reason behind his optimism was that India’s savings rate, which determines the money that can be deployed for development projects, was still high at 35 percent of gross domestic product (GDP).

“We cannot spend our way into prosperity. But there is scope to increase the allocations, particularly for infrastructure,” the prime minister said, hoping Finance Minister Pranab Mukherjee will address this issue in the upcoming national budget.

Manmohan Singh also sought to allay fears that pump priming of the economy by way of stimulus packages announced earlier and measures that will follow in the ensuing months would fuel inflation.

“It (expenditure towards infrastructure) will not add to inflation, but to our economic growth.”

According to the prime minister, fiscal deficit had increased sharply but even then India had enough resources to spend on flagship programmes thanks to the average annual growth of 8.6 percent achieved during the past five years.

He also said that his government was deeply committed to the agenda listed in the president’s address, adding flagship programmes will be further strengthened and public delivery system made more transparent.

“Much ground has been covered, a lot more has to be done.”

The motion of thanks, which says the members of the Lok Sabha are “deeply grateful” to the president for her address to both houses June 4, was moved by Congress party leader Girija Vyas and seconded by party colleague P.C Chacko.

The motion was subsequently passed by voice vote.