Manmohan Singh says economic growth set to improve, GDP to rise at 8-9%

Written by Press Trust of India | New York | Updated: Sep 30 2013, 04:44am hrs
New YorkAP.
Asserting that the fundamentals of the Indian economy are strong, Prime Minister Manmohan Singh has said GDP growth will improve in the second half of fiscal 2013-14 and that the government is commitment to get back to a sustainable growth rate of 8-9 per cent.

Addressing investors here, Manmohan Singh said the government will contain the fiscal deficit at 4.8 per cent of GDP and work towards achieving the medium-term objective of reducing the current account deficit (CAD) to 2.5 per cent of GDP.

"The results of our efforts will be visible in the second half of the year. We expect stronger economic growth in 2013-14 than in 2012-13. The second half of the year should see a distinct turnaround, partly because of the good monsoon and partly because of the steps we have taken," Manmohan Singh said.

The Indian economy grew at a four-year low of 4.4 per cent in the April-June quarter. In 2012-13, it clocked a decade low level of growth at 5 per cent.

"It is a fact that our growth rate has slowed down. We grew at an average of about 8 per cent for a decade. Last year, our growth rate dipped to 5 per cent. To some extent, this reflects the slowdown in the global economy and in all emerging markets," Manmohan Singh said.

The government, he said, is committed to getting India back to a sustainable growth path of 8-9 per cent.

"The fundamentals of the Indian economy remain strong...Our forex reserves stand at over USD 270 billion and are more than sufficient to meet India's external financing requirements," Singh said. In order to promote growth, India has taken a host of initiatives, including formation of the Cabinet Committee on Investment to expedite approvals for large infrastructure projects.

It relaxed foreign direct investment (FDI) norms in various sectors, including retail, telecom and aviation.

"FDI limits have been increased in several sectors and restrictions in the banking sector have been eased. The policy regarding FDI in defence has been clarified to indicate that FDI beyond 26 per cent can also be considered on merit," Manmohan Singh said.

Singh said the government will endeavour to meet the budgetary fiscal deficit target of 4.8 per cent of GDP. For the current fiscal, the CAD target is 3.7 per cent of GDP or USD 70 billion.

"We will make every effort to maintain a macro-economic framework friendly to foreign capital inflows to enable orderly financing of the CAD," Manmohan Singh said.