Government confident of returning to 9 percent growth

The government Monday expressed confidence that the country would return to a high economic growth rate of eight to nine percent, unveiling a blueprint of its policies aimed to ensure economic and livelihood guarantees and internal and external security.

President Pratibha Patil in her customary address to the joint session of parliament said the government was striving for “livelihood security for the vast majority of our population and continue to work for removal of poverty, hunger and illiteracy from our land”.

She said the year has been difficult for the world economy but expressed confidence that “long-term fundamentals of the Indian economy remain robust”.

“India’s growth prospects arise from factors such as high domestic savings and investment rates, favourable demographics, and a stable democratic polity. My government is confident that it will soon steer the country back to the high growth trajectory of eight to nine percent,” said the president in what could be her last address to the joint session before she completes her term in July.

Patil said the government will target four percent agricultural sector growth and nine percent overall growth in the 12th Five Year Plan period that begins April 1.

India’s economic growth has slowed down sharply this year mainly due to high interest rates, fragile global economic conditions and the government’s inability to push through key reforms.

The growth fell to 6.1 percent in the third quarter of the current financial year after growth of 6.9 percent and 7.7 percent in the previous two quarters.

Despite recent moderation, the president said, inflation, especially in food articles, continued to remain a major challenge for the government.

She said the fiscal and monetary measures taken by the government had yielded desired results in recent months in curbing inflationary pressure.

The president said the recently announced National Manufacturing Policy would help boost the share of manufacturing in GDP to 25 percent by the end of this decade from around 16 percent now and create 10 crore new jobs.

“Government will be establishing National Investment and Manufacturing Zones to promote growth in manufacturing,” she said.

Patil said the government would provide Rs.17,500 crore over the next five years for implementing trunk infrastructure projects and another Rs.1,000 crore for project development activities on the Delhi-Mumbai Industrial Corridor.

With the government facing stiff criticism for its alleged failure in tackling graft, Patil listed a number of measures which have “the potential of bringing about a transformational change in curbing corruption and enhancing transparency and accountability in governance.”

“The government has initiated action on various fronts to tackle the menace of black money,” she said.

The president’s address was interrupted many times with members from the opposition raising their voices when she read out the blueprint of the government policies.

She reiterated government’s commitment to resolve all outstanding issues with Pakistan through talks but asked Islamabad to take credible action against terrorist groups and terror infrastructure on its soil.

The President also supported the National Intelligence Grid and the National Counter Terrorism Centre which she said was aimed to improve India’s capability to counter internal security threats.

Among the “important challenges” that the nation country faces, she said, include our internal and external security within the framework of a “just, plural, secular and inclusive democracy”.

Patil said the government has launched a number of measures towards development of areas affected by left wing extremism and asserted that peace was returning to the northeast states and Jammu and Kashmir.

Situations there have “shown considerable improvement during the last year and the government has shown that acts of violence can be contained with a firm but humane approach”, she said.

“My government has always been willing to enter into dialogue with any group willing to abjure the path of violence. It is encouraging that a number of organisations have come forward seeking resolution of their grievances in a peaceful manner,” she said.
“Efforts are underway to build political consensus on the Goods and Services Tax, which will give a major boost to the economy by rationalising indirect taxes and giving full input credit,” she said.

To curb black money, Patil said the government has initiated action on enactment of a Benami Transactions (Prohibition) Act and had commissioned studies to assess the quantum of black money both within and outside the country.

“We are taking many steps to contain the generation and outflow of illicit funds from the country and for opening channels for getting information on black money from other countries,” the president said.

Patil said the government will target four percent agricultural sector growth and nine percent overall growth in the 12th Five Year Plan period that begins April 1.

India’s economic growth has slowed down sharply this year mainly due to high interest rates, fragile global economic conditions and the government’s inability to push through key reforms.

The growth fell to 6.1 percent in the third quarter of the current financial year after growth of 6.9 percent and 7.7 percent in the previous two quarters.

Despite recent moderation, the president said, inflation, especially in food articles, continued to remain a major challenge for the government.

She said the fiscal and monetary measures taken by the government had yielded desired results in recent months in curbing inflationary pressure.

The president said the recently announced National Manufacturing Policy would help boost the share of manufacturing in GDP to 25 percent by the end of this decade from around 16 percent now and create 10 crore new jobs.

“Government will be establishing National Investment and Manufacturing Zones to promote growth in manufacturing,” she said.

Patil said the government would provide Rs.17,500 crore over the next five years for implementing trunk infrastructure projects and another Rs.1,000 crore for project development activities on the Delhi-Mumbai Industrial Corridor.