India can sustain 9% growth: PM

Prime Minister Manmohan Singh today expressed confidence that, given the current rates of savings and investment, the country will sustain economic growth of close to 9 per cent in the medium term.

The Central Statistical Organisation has forecast 8.7 per cent growth in the gross domestic product (GDP) in the current financial year. The investment and savings rates, at 38.5 per cent and 37 per cent of GDP, respectively, are at historic highs.

"Our objective is to ensure that this growth process is inclusive, in all dimensions, and can be sustained while holding inflation under check. It has been our endeavour to ensure that inflation does not get out of control," Singh said while releasing Business Standard India 2008, the first offering of BS Books, the books division of Business Standard Ltd.

The 300-page book has 14 chapters, written by pioneering economists and administrators, many of whom are Business Standard columnists.

The prime minister said sustained development was not like going to a free dinner party but required sound macro-economic policies designed to raise savings, investment and productivity.

The challenge, he said, was to get the policy right. "If we can get both politics and prices right, the economy would be on surer ground for sustained growth. That is not just a challenge for political parties. It is equally a challenge for those who are in the business of shaping mindsets."

According to the prime minister, the creative energy of Indians has been unleashed and is contributing to the acceleration of economic growth.

"It has been our endeavour to ensure the long-term stability of the growth process, rather than seek short-term gains that may have socially and politically destabilising consequences," he said.

He said a large continental economy like India's could sustain fairly high rates of growth based on stable and sustained growth in the home market, even if there was turbulence in global markets.

"I also believe that it is our responsibility today to ensure that uncertainty in the global system does not harm our growth process," he said.

About the much-talked-about rise of India and China, the Prime Minister said the two countries, in the years to come, would be viewed as the new growth engines of the world economy.

"We are not yet there, but we will be. We can certainly sustain much better domestic performance based on our own effort and potential. Our macro-economic policies are aimed at ensuring this," he said.