 "President tells India Inc to keep faith in economy")
Addressing a galaxy of corporate leaders at the 2012 Business Standard Annual Awards function held in Mumbai, he said the pessimism was unwarranted as the economy would be able to achieve seven-eight per cent growth in the next two to three years.
“Despite the financial crisis, which created virtual mayhem in the largest economies of the world, India was able to withstand the turbulence and register a growth rate of 6.7 per cent in 2008-09. We steered through the rough economic weather and achieved 9.3 per cent economic growth in 2010-11,” the President said.
Acknowledging that the recent slowdown was a matter of concern, Mukherjee said one should not forget that, in comparative terms, India has performed much better than most of the major economies of the world.
Justifying his optimism in the innate strength of the Indian economy, Mukherjee said some growth indicators in some of the sectors should instil confidence. For example, in 2012, India’s automobile sector grew at 5.5 per cent, a pace faster than in most economies.
Similarly, India was the fourth-largest producer of steel in the world. With 4.3 per cent growth in 2012, the country ranked second among the top-10 steel-producing countries. India was also the third-biggest consumer of cement in the world in 2001. “Today, we are the second-largest consumer and, with a projected 6.8 per cent increase in consumption, the country is expected to register the highest growth among the top-five biggest cement consumers in the world in 2013,” he said.
The President said India’s per-capita income was rising steadily and the country was poised to be among the largest markets in the world. “The increasing purchasing power of the 350-million-odd-strong middle class would continue to drive demand.
“The reform process is on and the Financial Sector Legislative Reforms Commission (FSLRC), set up in March 2011, submitted its report yesterday,” the President said. He also listed the direct benefits transfer scheme, announced in his Budget speech as finance minister in 2011-12, as an example of the government’s corrective actions to take the reform process forward.
However, the President asked corporate leaders to take “immediate remedial measures” on innovation, as the economic growth would contract without it. For instance, in 2011, only 42,000 patent applications were filed in India, as against over 500,000 applications each filed in China and the US. The reason for this poor performance, he said, was obvious. India’s current expenditure on research and development was 0.9 per cent of gross domestic product (GDP). In comparison, it was 1.2 per cent in China, 1.7 per cent in the UK and 4.3 per cent in Israel.
“Our private sector, which contributes only a fourth of the total spending on R&D should increase its share, like in many of the leading economies,” he added.
The glittering function was presided over by Maharashtra Governor K Sankaranarayanan and Chief Minister Prithviraj Chavan. In his speech, Chavan said his state was facing an acute water shortage and this was the time when India Inc should come forward to help the government in transporting water to the needy.