Economic slowdown wont last long: PM

Written by fe Bureau | New Delhi | Updated: Aug 16 2013, 08:11am hrs
Prime Minister Manmohan Singh on Thursday announced a new scheme of financial assistance for the youth to promote skill development and employment as the ruling UPA prepares for general elections early next year, banking on its flagship rural jobs scheme, direct benefit transfer (DBT), and with a food security law on the cards.

He also said the current economic slowdown will be short-lived, adding that the recent measures to speed up infrastructure projects, increase coal output and ease FDI flows would produce visible results soon and our growth will accelerate, new employment opportunities will be generated.

The proposed skill development scheme would benefit about 10 lakh young men and women in the next 12 months, Singh said, addressing the nation from the ramparts of the Red Fort on the 67th Independence Day. We will shortly launch a new scheme under which those who have successfully acquired new skills will be given a grant of about R10,000, the minister said.

Singh also said that a high-level committee has been set up to collect accurate information about the socio-economic, educational and health status of the tribal population to design better schemes for them.

India would go to polls early next year, but policymakers are grappling with a series of socio-economic problems on account of reduced economic growth rate, high cost of living, a record current account deficit (CAD) and a sharply weaker rupee against the dollar that is impacting the country's competitiveness as well as inflation.

Wholesale-price based inflation rose 5.79% in July from a year earlier, its fastest pace in five months as the weaker rupee made imported raw materials costlier. The domestic currency has lost more than 10% so far this year.

Singh expressed optimism that the proposed Food Security Bill, already being implemented through an Ordinance, will get passed in Parliament shortly. This law will benefit 75% of our rural population and half of our urban population. Under the law, about 81 crore Indians would be entitled to receive rice at R3 per kg, wheat at R2 per kg and coarse grains at R1 a kg. This is the largest effort of its kind in the whole world, he said. Computerisation of public distribution system is a priority.

India's economy expanded at 5% in 2012-13, its slowest pace in a decade. We are trying our best to remedy the situation, he said. I believe that this phase of slow growth in India will not last long. In the last nine years, our economy has grown at an annual average rate of 7.9%. This pace of development is the highest in any decade so far, he said.

UPA is pinning hopes on rural welfare for its fortunes in the next elections. Singh said that the average annual rate of agricultural growth in the 11th Plan was 3.6%, which is more than both the 9th and 10th Plan levels.

We now see clear indications of enhanced economic prosperity in our rural areas. In the period 2004 to 2011, rural per-capita consumption has increased four times faster than earlier, he said.