PM confident India can sustain 8-9 per cent growth

On Board PM's Aircraft, July 11 (PTI) Notwithstanding
the uncertainty surrounding the global economic recovery,
India's Prime Minister Manmohan Singh on Saturday said India
should be able to sustain a growth rate of 8 to 9 per cent GDP
growth.

He said he was confident that India would come out of
this crisis stronger but the road ahead was also going to be
difficult to traverse.

"It is not not going to be easy but I am convinced that
India's savings rate, which is as high as 35 per cent with a
normal capital output ratio of 4:1, we should be able to
sustain, with a little bit effort, a growth rate of about 8 to
9 per cent notwithstanding the difficulties on the
international front," Sing told reporters accompanying him on
his way back home from a four-day visit to Italy.

Against the backdrop of the world attempting a recovery
from the recession caused by the financial crisis in the
heart of the developed world, he said he had discussions with
the leaders of G-8 and G-5, Egypt and African countries.

"After our discussions, it is my sense that while there
are some signs of recovery, the world economy is still a long
way from recovering the earlier growth momentum and there must
be questions whether that will soon be possible for the global
economy," he said.

The Prime Minister said he was returning home convinced
that India must continue to strengthen steps at home to regain
the 8 to 10 per cent growth path.

The Prime Minister said international environment would
not not be as supportive as before for some time to come. "I
am, however, confident that our domestic economic strengths
will enable us to return to our earlier path of rapid and
inclusive growth."

He said in his statement in the G-8,G-5 summit he did
mention that all available indicators for 2009 point to a
deceleration in the US economy in the European Union economies
and, therefore, one can say that the global environment for
the development of the countries of the third world has
undergone a sharp deterioration.

Singh noted that India's exports have suffered,
capital flows from abroad have declined and international bank
lending to the developing countries has declined.

"Therefore the challenge before us is to sustain and
revive the growth momentum which we have built up in the last
five years notwithstanding the deterioration in the
international environment for development," he said.

Answering a question, Singh said he had always viewed
his government's role was to get rid of chronic poverty,
ignorance and disease which still afflicted millions and
millions of people.

"We have made some important gains in the last five
years. We managed to impart to our country a stronger growth
momentum. We strengthened the forces which make for inclusive
social and economic development," he said.

He mentioned that the government had put in place
social safety nets which soften the harsh edges of extreme
poverty substantially.

"But this is a long and arduous journey and our
challenge is to take full advantage of the instrumentalities
which are now now in place for inclusive growth to plug
loopholes, to reduce leakages and to ensure that these
instruments become more effective instruments of social and
economic change, accelerated growth, more inclusive
development and more emphasis on rural development and
agriculture."

Sing said it was a continuation of the journey they
undertook for five years with renewed commitment and
determination even though it must be recognised that the
international environment was not not as supportive as was
imagined at one time. P

To a question on the difficulties faced by the
Information Technology sector in view of the global crisis,
Singh said the world financial system was the greatest source
of demand for the IT services.

"I think things are stabilising- the global financial
system seems to have reached a new plateau. It is not not a
high growth. It is not not a high growth plateau. So I do
expect there should be some improvement in the international
environment for IT," he said.

With regard to exports of textiles and garments, the
Prime Minister said he did feel that the world economy could
effectively stand up against protectionist sentiments, the
demand pressures can move in the reverse direction as well.

"It is also possible to do more at home to create
demand for IT services. I think in the e-governance processes
in our own country, we have a vast unexplored market. And we
can take full advantage of the global slowdown. the Indian
Information Technology industry need not not face such a
bleak future." PTI vsc
anu