Terming business mood in the country as unduly pessimistic, Prime Minister Manmohan Singh today said the Indian economy is facing a temporary downturn and can return to 8 per cent growth path with speedy and decisive government action.
Attributing the growth rate slipping to decade low of 5 per cent to global slowdown, he said domestic constraints "must be removed if the economy is to perform at full potential."
Addressing the CII AGM after a seven year gap, Singh said: "If the business mood was unduly optimistic in 2007, I think it is unduly pessimistic today. This needs correction."
The growth has slowed to 5 per cent which is "clearly disappointing", he said, adding that this is not a permanent reduction in the longer term growth potential.
"I do not believe our future is 5 per cent growth. We grew at an average of about 8 per cent in the last ten years and we can get there again. But this calls for speedy and decisive government action," he said.
The country has to cope with weak exports and higher Current Account Deficit (CAD), which is due to global factors, he said adding the CAD will be around 5 per cent of GDP in 2012-13.
"We cannot do much about the global slowdown. We can only
Wait for the world to get back to more normal conditions ... But we can act forcefully to deal with the many domestic constraints that have arisen...".
Observing that the high fiscal deficit is unacceptable, Singh said: "We are determined to do everything possible to achieve the fiscal deficit target".
As per the road map, the government aims to bring down the fiscal deficit to 3 per cent of GDP by 2016-17.
"I would urge Indian industry to have faith in our determination and avoid getting swamped by negativism," he said.
