MUMBAI, FEB 13: Former union finance minister Manmohan Singh on Saturday stressed the need for an agenda to increase the annual savings rate by half per cent to enable a capital formation of 30 per cent of GDP and eight per cent economic growth.
Singh said India would need an annual growth rate of 7-8 per cent to tackle poverty and achieve a sustainable level of economic and industrial growth. He was addresing a national conference on "Indian Economy – Challenges of the 21st century," organised jointly by the Yashwantrao Chavan Pratishthan and Maharashtra Economic Development Council.
“An annual increase of half per cent in savings rate would take the household savings rate to 28% and adding the 2% capital inflows, the total investible resources of the country would be 30 % of GDP,” he said. He added that high growth rate would need greater investment from both public and private sectors. "Unless the process of wealth creation in the country is robust enough, maladies like illiteracy and poverty cannot be tackled," he said, adding that India’s growth strategy should accelerate wealth creation while protecting the interests of the unborn generation.
The public investment on physical infrastructure should touch 8 % of GDP from the present 5.5 %. He called for a greater spending for science and technology adding that current investment in this area was less than a per cent of GDP.