Economy heading towards better times, no reason to despair : Prime Minister Manmohan Singh

New Delhi – Prime Minister Manmohan Singh Wednesday sought to dispel apprehensions of the Indian diaspora on the state of the economy, saying the country was heading towards “better times” and there is no reason to despair about its present or worry about the future.

He also said that regardless of the outcome of the next elections, they will once again demonstrate the strength of India’s democracy and its institutions.

“I know that many of you have questions about the future of the Indian economy and concerns about social challenges, the shape of our polity and the issues of governance in our country. There is a perception in some quarters outside India that the country is losing its momentum of the past decade,” he said.

Singh said the issue is also amplified by the “political contestations in India, which are inevitably louder in the election season” that is now on the horizon.

“I wish to assure you that there is no reason to despair about our present or worry about our future. Indeed, as I have said earlier, we are heading into better times ahead and I would urge you to remain engaged in the future of this country with confidence and optimism,” the Prime Minister said at the 12th Pravasi Bharatiya Divas here.

He said despite a number of external and domestic factors, “our economic fundamentals are strong.”
“Our economy has done well over the past decade. In the nine years since 2004, we averaged a healthy growth rate of 7.9 percent per annum. There has been no doubt a slow down in the recent past, and we will probably end this year at the same level as last year with 5 percent growth,” he said.

Singh pointed out that a number of international as well as domestic factors have contributed to this situation.

“Despite these challenges, our economic fundamentals remain strong. Our savings and investment rates are still over 30 percent of our GDP and the entrepreneurial spirit in India is very much alive and kicking,” Singh said.

Referring to UPA government’s efforts to bring more transparency and accountability in governance, Singh said the task is complicated because there is a need to overhaul entrenched practices and systems while respecting the federal nature of Indian polity.

“Strengthening governance is an ongoing process and we can never say that we have done enough, but I am confident that we are moving in the right direction,” he said.

He said the Right to Information, the Lokpal legislation, the Government Procurement Bill, changes in the systems for the allocation of natural resources and empowering our law enforcement and audit agencies are some of the steps the government has taken in that direction.

To bolster his argument that the present and the future of the country’s economy and polity remain sturdy, Singh said regardless of the outcome of the next elections, they will once again demonstrate to the world the strength of India’s democracy and its institutions.

He said the general elections due this summer will also prove the enduring nature of these ideals that constitute the bedrock for India’s progress and its quest for a life of opportunity, justice and equity for all citizens.

Singh said recent developments point to the greater enrichment of the country’s democracy, which is becoming more participative and interactive, with people using both traditional methods and new digital tools to mobilise and communicate.

“It is especially encouraging to see our youth from all walks of life not only articulate their expectations and aspirations, but take actively to politics to shape their future. This is only to be welcomed.

“It is only thus that the extraordinary transformation that is taking place in our country on multiple levels can be distilled constructively into our democratic process, which has the vitality and responsiveness to reflect the new and emerging concerns and hopes and aspirations of our people. I am confident and so should you be that the future of our country as a pluralistic democracy is safe and secure,” he said.

The Prime Minister noted that in recent months, the government has taken a “very” wide range of decisions to accelerate the implementation of mega infrastructure projects, reform tax administration, improve fiscal management, liberalise foreign direct investments and rationalise the system for allocation and utilisation of natural resources.

In an apparent reference to logjam in Parliament, he said “with greater political support, we could have legislated deeper reform measures – for example, in the financial and insurance sector. However, our decisions are already beginning to make an impact and India is re-emerging as an attractive investment destination. I am confident you will see the evidence clearly in the next few months.”

Singh observed that while India is changing in a way that is significant, it is not always evident to those who do not see the big picture.

Underlining the achievements of his government, the Prime Minister said, over the past ten years, India’s communication networks have expanded exponentially and much of rural India will be connected by broadband in the very near future. About a thousand institutions of higher education are today part of the high speed National Knowledge Network. Telephony is now within the reach of everyone.

He said the education sector has been radically reformed with Central Universities having gone from 17 to 44 and the IITs and IIMs doubling in number.

At the primary level, nearly every child in India is going to school today. The National Skills Development Authority is working with other stakeholders, including those from the private sector, to train 50 million people for the workforce during the next five years.

“We have added over 17000 km of highways and more than 200,000 km of new roads in rural areas. Our power generation capacity is expanding rapidly, aided by initiatives in solar, wind and nuclear energy to give ourselves a more sustainable energy future,” he told the gathering.

He stressed that India’s economic growth has not only accelerated, it has also become socially more inclusive and regionally more balanced.

“Inclusive development has always been the guiding principle of our government and we have pursued it with great vigour and purpose in recent years. Our poverty levels are declining at faster rates; economically weaker states are growing at faster rates; agriculture growth has accelerated; and real rural wages have increased three times since 2004 (when UPA I came to power),” Singh said.

He said the development is a result of “path-breaking legislation and schemes” that have created unprecedented rights to work, food security and right to education.

“For our government, inclusive development is not merely a moral imperative or a political necessity, but an essential ingredient of sustainable long-term economic growth and social stability,” Singh said.

The Prime Minister also released a book ‘Incredible Opportunities Back Home’, which carries guidelines on investment opportunities in India, on the occasion.