Prime Minister Manmohan Singh in his five-year regime has first time accepted that India’s growth rate may come down in the next year as against the current fiscal year due to continuous global recession but expressed his confidence on India’s strong fundamentals and banking systems.
Addressing a meeting of Indian Diaspora and business community in Oman on Sunday (November 09) Prime Minister said, “Despite the global economic downturn, the Indian economy is expected to maintain a growth rate of 7 to 7.5% next year.” While on India’s banking and financial institutions he assured that banks and financial institutions are well-capitalised and depositors are no need to scare.
Earlier Dr. Singh had forecasted the country’s growth rate of above 8% but now his estimation has slightly slipped down due to the gloomy economic situation of the world. He was speaking on the second day of his three days visit to Oman and Qatar.
India, the third largest Asian economy was growing over nine percent since last four years and UPA government even Reserve Bank of India was also forecasting to continue this trend in the beginning of this fiscal, but later enforced to revise it to 8.4% after severe global recession. Despite the global financial crisis, India is still growing at one of the fastest growth rate after China in the world. In the first quarter result, India has registered a 7.9% growth rate while its neighbour China marked 10.1% for the same period.
Specifying the macro-economic fundamentals, Singh said that our domestic savings had remained at a healthy 35 per cent of GDP and our investment rate is 37% of our GDP, while it is likely to increase in the coming future, as the young demographic profile would lead to broaden the rates of savings and investment over the coming years, PM expressed hope.
Due to the economy downturn, India’s industrial growth has slowed down to 1.3% in August while it was 0.9% a year ago. Likewise, other six core infrastructure industries have also registered a sluggish 5.1% growth in September and it emphasises that India can’t be remained untouched by this recession.
However, Prime Minister is confident to restore the growth rate as UPA government has provided the credit to all sectors including infrastructure, corporate and, small and medium enterprises. Moreover, government has also provided tax relief to troubled sectors like civil aviation and steel for further support.
Before leaving Oman, India and Oman signed a Memorandum of Understanding (MoU) on Saturday to set up a joint investment fund that would open the door for greater investment in both the nations. ‘There would be an equity contribution of $100 million from both the countries and the corpus would eventually be enhanced to $1.5 billion,’ sources said.
PM also appealed to all attended industrialists, to invest surplus liquidity into key infrastructure sectors in India.
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