New Delhi: Prime Minister Manmohan Singh on Tuesday said the country’s economy is even now capable of growing by 8-9%, the same rate as it did before the global financial meltdown set in.
“Since our savings rate is as high as 35% ... if all work together, we can achieve a growth rate of 8 to 9%, even if the world economy does not improve,” he said while winding up the debate on motion of thanks to the President’s address to joint sitting of Parliament.
The global crisis, Singh said, had affected India’s economic growth that slipped from 9% to around 7% in the previous fiscal.
The fall in growth is mainly due to dip in investments, which are key to economic expansion.
The Prime Minister said that during the current fiscal the country would grow by 7%.
“This year we will maintain at least 7% growth rate. In the short-run, we cannot do better but this is also good enough,” he said.
The Reserve Bank of India (RBI) in its monetary policy for the current fiscal projected the economy to grow by 6%, lower than the 6.7% achieved during 2008-09.
The Prime Minister said India has scope for increasing public spending, particularly on upgrading infrastructure, despite a high fiscal deficit.
“There is considerable scope for increasing public expenditure, particularly on infrastructure projects,” Singh said.
Singh said India would meet Pakistan “more than half way” if Islamabad cracked down on terrorists.
“I expect the government of Pakistan ... use every means at their disposal to bring to justice those who had committed these crimes in the past, including the attack on Mumbai,” Singh said.
The speech came only weeks after Singh’s resounding election victory that gave the Congress-led government a strong mandate in its second term.
“If the leaders of Pakistan have the courage, the determination and the statesmanship to take this road of peace, I wish to assure them that we will meet them more than half way,” Singh added.
India has also blamed some Pakistani state agencies of backing the attack that killed 166 people in November.
Islamabad denied official involvement but has acknowledged the raid had been launched and partly planned from Pakistan.