Economy is likely to grow by 7 per cent or a "little more" in the current fiscal returning to a fast expansion pace after a sluggish 2008 due to the global economic crisis, Prime Minister Manmohan Singh said today.
"The momentum (of growth) was ...interrupted by the global economic crisis in 2008 and we slowed down to 6.7 per cent in 2008-09 and are likely to achieve 7 per cent or a little more in 2009-10," Singh said, inaugurating the 92nd Annual Conference of the Indian Economic Association (IEA) here.
Joining the debate on the impact on reforms on poverty, Singh said opening up of the Indian economy have had no adverse effect on the poor and the percentage of population below the poverty line continued to decline.
"There is no evidence that the new economic policies have had an adverse effect on the poor. However, I would readily agree that what has been achieved is not enough. Much more needs to be done and the decline should have been faster than we have experienced," he said.
On the opening up of the Indian market, he said that India's growth rate had stuck at low levels of around 3.5 per cent for long triggering considerable rethinking and debate on economic policy. The move began in the 1980s and led to a series of systemic reforms in the 1990s.
The Prime Minister said that the country had an average economic growth of 6.8 per cent between 1992-93 and 2009-10. It was likely to be 8.5 per cent between 2004-05 and 2009-10. "We can therefore claim that we have entered the target range for growth set by Pandit Jawaharlal Nehru long ago."
"We moved away from the earlier paradigm of extensive government control, a suspicion of market forces and an extensive reliance on protection of domestic industry to an economy with much greater acceptance of the beneficial role of markets and greater openness to trade and foreign investment," the Prime Minister said.
During the debate, "many Cassandras among both economists and representatives of industry" argued that the new policies would be disastrous for the economy, that economic growth would be adversely affected and the external liberalisation especially would lead to a collapse of balance of payments.
Singh told the economists that it should be noted that India did not have a balance of payments crisis since 1991 which was "surely a major empirical refutation of the doubts and fears of those who felt that the complex import controls which existed earlier were necessary to manage the balance of payments".
