PM confident on growth, despite US crisis

The Prime Minister Manmohan Singh today said the sub-prime lending crisis in the United States may impact India's growth. However, he expressed confidence that the country will achieve its growth targets, Singh said.

Speaking at the National Development Council meeting here today, Singh said: "There are some clouds on global financial market following the sub-prime lending crisis. There are worries that the growth of the US and other leading economies may slow down and some may even go into a recession. This may impact both our exports as well as capital flows. Our economy is now increasingly integrated into the global economy with external sector now accounting for almost 40% of GDP. Hence we cannot be fully immune to international development. "

However, Singh said one need not be pessimistic about the country's growth targets. "It only implies that we need to re-double our effort to maintain the domestic drivers of growth and ensure that policy facilitates even faster growth. Prospects on the growth front are encouraging. It is possible that with the correct set of policies and dedicated efforts by both the central and state governments, we will not only able to maintain this momentum of high growth into the near future, but may be able to raise it to 10%", he added.

The PM said the high growth is due to high savings and investment rates.

The country's saving rate has touched 34% of GDP while the investment rate stands at 35%.

The saving and investment rates are likely to go up because of our young population, Singh said.