Slump will not last long... Govt working hard: PM
17 Aug 2013 3:14 AM IST
The slowdown in Indian economy will not last long as government is working hard to remedy the situation, Prime Minister Manmohan Singh said on Thursday as he saw the positive impact of the move to open up several sectors to foreign direct investment in the coming months.
'I believe that this phase of slow growth in India will not last long... The average rate of economic growth that we have attained in the last nine years (7.9 per cent) shows what we are capable of,' Singh said in his address to the Nation from the ramparts of Red Fort on the occasion of 67th Independence Day.
The government expects the economic growth to recover to 6 per cent in the current fiscal, from the decade low level of 5 per cent recorded in 2012-13.
'... economic growth has slowed down at present and we are working hard to remedy the situation,' Singh said.
Singh said the government has eased investment caps in several sectors and simplified procedures to boost flow of foreign direct investment (FDI).
Last month, the limit on foreign holdings in telecom was raised from 74 per cent to 100 per cent while restrictions in a dozen other sectors from insurance to tea plantations were eased or abolished. Besides, it has also liberalised the ECB norms for corporates.
'In the coming months, we will see visible results of these efforts to increase investment. Our growth will accelerate, new employment opportunities will be generated and there will be improvements in the infrastructure sector,' he said.
Faced with widening current account deficit (CAD), the government is looking at ways to attract foreign funds in the form of FDI, external commercial borrowings (ECBs) and foreign institutional investment (FII).
The government will kick-start a number of new infrastructure projects including 8 new airports and two new sea-ports in the coming months to boost sluggish economic growth, Singh said while listing out government's initiative in this key sector.
'We will start work on a number of new infrastructure projects in the coming months. This includes 2 new ports, 8 new airports, new industrial corridors and rail projects,' he said.
India is not the only country facing economic slowdown and world over there has been a slump in export markets and growth in developing countries have been affected.
'It is not only our country that is facing economic difficulties. The last year has been difficult for the world economy as a whole. Major European nations are experiencing a slowdown these days,' he added.
In the last nine years, the economy has grown at an annual average rate of 7.9 per cent. 'This pace of development is the highest in any decade so far,' he said.
After growing at over 8 per cent for two consecutive years, the economic growth slowed to 6.2 per cent in 2011-12 and further to decade's low rate of 5 per cent last year on account of poor performance of farm, manufacturing and mining sectors.He said rapid economic growth is an imperative as without it the country cannot possibly achieve targets of removal of poverty, provision of good quality education and health services and creation of new employment opportunities.
In order to accord fast track clearances to large infrastructure projects, the government had in January set up a Cabinet Committee on Investment (CCI), headed by the Prime Minister.
'I believe that this phase of slow growth in India will not last long... The average rate of economic growth that we have attained in the last nine years (7.9 per cent) shows what we are capable of,' Singh said in his address to the Nation from the ramparts of Red Fort on the occasion of 67th Independence Day.
The government expects the economic growth to recover to 6 per cent in the current fiscal, from the decade low level of 5 per cent recorded in 2012-13.
'... economic growth has slowed down at present and we are working hard to remedy the situation,' Singh said.
Singh said the government has eased investment caps in several sectors and simplified procedures to boost flow of foreign direct investment (FDI).
Last month, the limit on foreign holdings in telecom was raised from 74 per cent to 100 per cent while restrictions in a dozen other sectors from insurance to tea plantations were eased or abolished. Besides, it has also liberalised the ECB norms for corporates.
'In the coming months, we will see visible results of these efforts to increase investment. Our growth will accelerate, new employment opportunities will be generated and there will be improvements in the infrastructure sector,' he said.
Faced with widening current account deficit (CAD), the government is looking at ways to attract foreign funds in the form of FDI, external commercial borrowings (ECBs) and foreign institutional investment (FII).
The government will kick-start a number of new infrastructure projects including 8 new airports and two new sea-ports in the coming months to boost sluggish economic growth, Singh said while listing out government's initiative in this key sector.
'We will start work on a number of new infrastructure projects in the coming months. This includes 2 new ports, 8 new airports, new industrial corridors and rail projects,' he said.
India is not the only country facing economic slowdown and world over there has been a slump in export markets and growth in developing countries have been affected.
'It is not only our country that is facing economic difficulties. The last year has been difficult for the world economy as a whole. Major European nations are experiencing a slowdown these days,' he added.
In the last nine years, the economy has grown at an annual average rate of 7.9 per cent. 'This pace of development is the highest in any decade so far,' he said.
After growing at over 8 per cent for two consecutive years, the economic growth slowed to 6.2 per cent in 2011-12 and further to decade's low rate of 5 per cent last year on account of poor performance of farm, manufacturing and mining sectors.He said rapid economic growth is an imperative as without it the country cannot possibly achieve targets of removal of poverty, provision of good quality education and health services and creation of new employment opportunities.
In order to accord fast track clearances to large infrastructure projects, the government had in January set up a Cabinet Committee on Investment (CCI), headed by the Prime Minister.
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