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Mood unduly pessimistic,can return to 8% growth,says PM

He said that India had the potential to revert to an 8 per cent annual growth rate

Written by ENS Economic Bureau | New Delhi | Published: April 4, 2013 2:04 am

Striking a “contrarian note”,Prime Minister Manmohan Singh has described the business mood in the economy as “unduly pessimistic”.

Addressing the annual CII general meeting on Wednesday,his first in six years,Singh said this pessimism was unwarranted despite the growth rate slipping to 5 per cent in 2012-13,and the current account deficit doubling to the same level. He said that India had the potential to revert to an 8 per cent annual growth rate.

Singh promised “speedy and decisive action” by his government,including faster clearances for investment and further steps to attract foreign investment to India.

“Corruption is a problem. Bureaucratic inertia is a problem. Managing coalition is not easy. But these problems have not arisen suddenly. They were all there even earlier when the economy was growing at 8 per cent,” he said.

Referring to his last speech at the forum,when he had asked business leaders to adopt a 10-point social inclusion agenda,including caps on salaries of promoters and cutting down consumption,at a time when the growth rate was 9.3 per cent,he said: “Some of my friends later told me that my remarks seemed unnecessarily downbeat at the time.”

He said he proposed to again strike a contrarian note this time,saying the ingredients for revival of growth were being put in place,including improvement in the government’s fiscal position to create space for investment by the private sector and ensuring faster decisions by removing “hesitation on the part of officials to take critical decisions”.

Singh said his government has “given clear signals that we welcome foreign investment”. Foreign investment is essential to bridge the gap between exports and imports that touched $90 billion last year. “Even as our industry steps out to invest abroad,we must welcome foreign investors using India as a part of their global supply chain,” he said.

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