Fears about reforms misplaced: PM

Prime Minister Manmohan Singh today said fears about reforms, including foreign direct investment (FDI) in retail, were overstated and merely reflected a lack of self-confidence, even as he exhorted Indians to start thinking "big".

"Many of our apprehensions about liberalisation are often overstated. We often lack the self-confidence required to deal with new opportunities," Singh said in his speech circulated at the golden jubilee celebrations of Life Insurance Corporation (LIC) of India here.

On the retail sector, Singh said fears were being expressed about opening it up to foreign investment. "I am reminded about the kind of apprehensions that were expressed when we first proposed foreign investment in the insurance sector," he said.

"We worry far too much about the risks and do not grasp adequately, power of our own capabilities," the Prime Minister said. "I urge all Indians to think big. I urge them to unleash their creative potential. We can take on the competition and make good use of new opportunities at home and abroad," Singh said.

The Prime Minister said LIC had proved all doubters of liberalisation wrong and surged ahead, creating new records in a more competitive market after the sector was opened up to FDI.

"Once again we find such apprehensions are being expressed today when we look at new market opportunities. There is excessive anxiety with change," he said.

Turning to the economy, he said India was at the cusp of a historic change and it was possible to enter into a sustained phase of 7-8 per cent growth, breaking away from trends of the recent past.

While the critics of reforms and liberalisation in the insurance sector worried about the impact these would have on LIC, the actual experience had shown that LIC had the internal capacity for change and competition, Singh said.

On the economy, he said it had already demonstrated the capability to move on to higher growth path with the manufacturing sector showing tremendous dynamism and the services sector being key driver of growth.

Hopefully, with focus on agriculture and irrigation, the primary sectors too would show faster growth, the Prime Minister said.

Infrastructure was a constraint and the country required huge investments in roads, railways, ports, power, civil aviation and telecom to ensure that growth process was not throttled, he added.

In this dynamic scenario, it was essential that the country had developed and efficient financial markets, he said, noting that Indian stock markets were modern and its banking system had shown remarkable improvement in its parameters and performance.

"In fact, public sector banks have been remarkable in the manner in which they have adjusted to competition and have proved wrong all predictions about a steep erosion in the market share," Singh said.

The insurance was a key building block and along with pension funds, long-term savings should be mobilised and hence both these were critical for growth of the economy, he said.