New Delhi: It was
disappointing that growth had slowed to five percent but this was
temporary and the government was taking corrective measures to get
back to eight percent growth, Prime Minister Manmohan Singh said
Addressing the annual meeting of the Confederation of Indian
Industry (CII), the prime minister said the government and
business have to be partners in writing the story of development.
"We are seeing a temporary downturn, which does happen. We must
recognise it as such and take corrective action. I do not believe
our future is five percent growth. We grew at an average of about
eight percent in the last 10 years and we can get there again," he
He said consensus today was that unless the government acts
swiftly, growth that has already decelerated, would be perennially
stuck at five percent.
Asking industry to have faith in the government and not get swayed
by negativity, Manmohan Singh said: "In my last address in 2007, I
chose to strike a contrarian note. When everything seemed to be
going exceptionally well, I struck a note of caution."
"I propose to strike a contrarian note again. If the business mood
was unduly optimistic in 2007, I think it is unduly pessimistic
today," he said.
He said the world was affected by the global downturn in 2008.
The prime minister said corruption and inertia in bureaucracy were
problems; managing a coalition was not easy but these were not
issues that have risen suddenly and were there even when India was
growing at eight percent.
"We are seeing temporary downturn which happens time to time. We
must act and take corrective action. If we go back 15 years, our
average growth was 7.5 percent and this kind of dynamism doesn't
disappear suddenly," he said.
According to Manmohan Singh, the Indian economy was driven by the
private sector with 75 percent investment in private sector and it
needs to be corrected to ensure truly inclusive growth.
He said the problem was due to the global downturn. "The world
recovered from 2008 crisis and now is stumbling from debt crisis
in eurozone. There has been negative growth in Europe and zero
growth in Japan."
The prime minister said the government was taking domestic
measures to deal with the crisis.
"We can act forcefully to remove the many domestic constraints
that have arisen to get the economy to perform at full potential,"
"I am encouraged by the progress that we have made in the last
three months by the work of Cabinet Committee on Investments. The
committee has made a difference in speeding up clearances (for
projects)," he said.
"The real message of the experience with the 11th Plan is that we
not only grew at an average rate of eight percent, our growth was
more inclusive. If we did it in the 11th Plan, there is no reason
why we cannot do even better in the 12th Plan," he added.