New Delhi: Prime Minister Manmohan Singh promised that his government would improve infrastructure in Asia’s third-largest economy to keep up economic growth that he said could reach 7% in the year ending in March.
Speaking a day after his government was criticised by Lakshmi Mittal, chairman of top global steelmaker ArcelorMittal, for slow progress on realising projects, Singh pledged that his government would remove infrastructure constraints.
The prime minister said his coalition government would address bottlenecks in infrastructure, farming and healthcare, which are priorities for the Congress-led government that took power last year.
“I recognise the frustration well-wishers feel when they lament why things don’t work faster or why well-formulated plans and policies don’t get implemented as well as they should be,” Singh told a conference of expatriate Indians.
“It is probably true that we are a slow-moving elephant but it is equally true that with each step forward we leave behind a deep imprint.”
On Thursday, Mittal berated Center and state governments for slow progress on steel projects.
“We have to blame the whole country for this. We have not experienced this kind of growth and we did not experience this kind of interest in investments in India,” Mittal, who lives in London but carries an Indian passport, said in New Delhi.
“The states were not prepared. Neither the central government nor the states were prepared for this kind of interest in the steel industry,” Mittal told reporters.
Infrastructure And Growth
India’s development has failed to meet fast economic growth. Foreign investors complain about slow progress in shoring up infrastructure and have called for less bureaucracy.
With an economy that grew at least 9% annually in the three years through March 2008, India is choking on overcrowded roads and railways, with large and small businesses forced to self-generate power to ensure supply.
Infrastructure investment is seen as a driver to ensuring growth and meeting rising expectations in a democracy where a large share of its 1.2 billion population remains poor.
Singh’s growth forecast of 7% was slightly below previous forecasts by his policymakers. Speaking at the same function later, finance minister Pranab Mukherjee was more upbeat and said growth would be around 7.75% in the year to March 2010.
But Singh said he was optimistic that India, which along with China is helping pull the world out of recession, could return to annual growth rates of 9-10% in a few years.
Indian policymakers, including the finance minister, have said they expect the economy to grow around 8 percent this fiscal year, after it slowed to 6.7% in 2008/09.
Singh urged Indians living abroad to look at long-term investments in India and help the government to accelerate growth and social development.
“Oversees Indians, however, while being good savers tend to be somewhat conservative investors. Most remittances are placed in bank deposits. Foreign direct investment in India by overseas Indians is low and far short of potential,” Singh said.