Economy to grow by 7-8%: PM

Manmohan says India is at a cusp in its development trajectory

Prime Minister Manmohan Singh today said India was poised to deliver 7-8 per cent economic growth in the next fiscal year.

"The growth rate has almost been 7 per cent this year on the back of 8 per cent in the previous year. All indications at the moment are we may be able to deliver a 7-8 per cent growth even next year," he said while inaugurating the centenary celebrations of the PHD Chamber of Commerce and Industry in the Capital.

It was undeniable that India was "at a cusp" in its development trajectory, he said. The government, Singh added, was committed to putting in place a set of policies which would provide the necessary environment to make this growth possible.

After years of the Hindu rate of growth, the economy broke fresh ground in the nineties and has been able to deliver growth in the range of 5-6 per cent, he said.

"This in itself has enabled considerable enhancement in income in general. It has also helped reduce poverty significantly. We are now at a point in time where we need to accelerate this growth further and jump into the 7-8 per cent band," he said.

Singh said the additional 1-2 per cent points in the growth rate, which seemed minuscule, could translate into a substantial difference over a period of time.

"In 20 years, a growth rate of 8 per cent will deliver twice as much against a rate of 5 per cent," he said.

Finance Minister P Chidambaram would soon provide details of the special purpose vehicle (SPV) being set up for providing investment capital for infrastructure projects, the prime minister said.

Speaking on private container freight, Singh said the introduction of special container trains should be a major step forward towards infrastructure development.

Citing the buoyancy witnessed in the civil aviation sector, Singh said, "I believe we are on the right track and if the momentum is sustained, we will be able to address the infrastructure problem."

He, however, admitted the first set of reforms in the nineties were far easier as they related largely to external trade liberalisation and removal of industrial trade licences.