Sustaining 7% growth needs more investment: Manmohan Singh

Economic policies have to be designed in a manner that the redistributive process does not fill up public financing and nor is the growth process hampered, the former prime minister said.

By: ENS Economic Bureau | New Delhi | Published:November 27, 2016 2:05 am
Businessmen take selfies with former Prime Minister Manmohan Singh during the valedictory session of PHD Chambers’s 111th annual session in New Delhi on Saturday. PTI Businessmen take selfies with former Prime Minister Manmohan Singh during the valedictory session of PHD Chambers’s 111th annual session in New Delhi on Saturday. PTI

Former Prime Minister Manmohan Singh on Saturday said that economic growth alone may not be sufficient to ensure that benefits actually trickle down to poor people in the country. He said the government should focus on providing decent employment and improving incomes of weaker sections of the society. Sustaining the current growth rate of 7 per cent would “require significant increase in the rate of investment”, particularly in infrastructure sectors as well as revitalisation of export sector, Singh said.

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“While growth is necessary for poverty reduction, it may not trickle down to the bottom groups unless some preconditions are met. There is a need to go beyond the establishment of social safety nets to protect the vulnerable groups from the risks, and focus on providing decent employment and raising incomes of the weaker sections through explicit policy interventions,” Singh said.

“India needs to create 12 million new jobs per annum to absorb new entrants to the labour force. The available data on employment point to significant gaps in performance,” he said at the annual session of PHD Chambers of Commerce.

Economic policies have to be designed in a manner that the redistributive process does not fill up public financing and nor is the growth process hampered, he said. “To achieve this objective, inclusive development needs to be combined with consolidation of public financing, financial stability, employment generation economic growth and protection of environment,” he said.

With India is moving from a phase of 1991 economic reforms to an era of sustainable development; the priority now must not only be to accelerate, but the multi-dimensional aspect of growth, equity, inclusion, employment generation and environmental sustainability, he said.

While successive governments have been successful in achieving income poverty reduction, reducing hunger and malnutrition in the country still leaves much to be desired, he said.

“India has to adopt a multi-pronged strategy that includes rapid growth, reducing poverty and creating employment opportunity, improving access to essential services in health and education, especially for weaker section, empowerment to education skill development and creating new job opportunity,” he said.