Inflation, interest rates should be low, says PM

Prime Minister Manmohan Singh today said there was a need to keep inflation and interest rates "reasonably low" to take full advantage of the opportunities provided by globalisation.

"If we have to take full advantage of the opportunities provided by the world markets, we must improve our infrastructure, enhance our capacity to be part of global supply chains, keep our inflation and interest rates reasonably low and improve the capacity of our financial system to intermediate savings to productive investment," Singh said.

The prime minister was addressing the golden jubilee celebrations of Administrative Staff College of India in Hyderabad.

Singh also said there was a shortage of skilled workers in the economy and it could constrain growth. "Even at current rates of growth, I find our industry is already facing a huge skills shortage...These supply shortages can constrain growth," he said.

Speaking on public sector companies, the prime minister said the government wanted to give opportunities to state-run companies to restructure and rationalise to build on core competencies.

"Recently we have seen a positive turnaround in the performance of the railways. This has to be sustained. We also have to tone up the management of other large public sector undertakings, including Food Corporation of India and oil public sector undertakings," he said.