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We can sustain 8 per cent growth rate: Manmohan

Ashok Dasgupta

“No effort will be spared to neutralise impact of global meltdown”

“We will survive this crisis and emerge stronger if we have the will to work together”
“Global institutions of governance must be made more inclusive and representative”

NEW DELHI: Prime Minister Manmohan Singh on Friday assured the nation that the government would spare no effort to “neutralise to the maximum possible extent” the adverse impact of the global financial meltdown on the country’s economy, so as to sustain a growth of about eight per cent this fiscal.

In his inaugural address at the HT Leadership Summit here, Dr. Singh reminded delegates that although the world was in “choppy waters” owing to the “deep crisis,” India had the resilience to cope with the current financial turmoil, as it did in 1991 when the domestic economic crisis was “more severe” but was tackled efficiently.

“In a globalised world, we cannot pretend that we will not be affected by the crisis that has not been created here but somewhere else. But I assure you that despite the international environment, we have the capacity and ability to sustain the growth rate of about eight per cent and will do so,” he said.

Seeking to instil confidence in India Inc. and the people at large, Dr. Singh reiterated that the government was fully committed to ensuring that the industry “sails and sails, not in the choppy waters but moves ahead with speed … We can and we will survive this crisis and emerge stronger if we have the imagination and will to work together.”

Cautioning that “competitive politics” could hamper this resurgence process, the Prime Minister said: “We will, through the use of fiscal policies, through the use of monetary policies, through the use of public investment, ensure that the shortage of demand coming as it is from the global slowdown is neutralised to the maximum possible extent.”

The government, Dr. Singh said, had anticipated a slowdown in the economy and that was why the Budget (2008-09) made provisions for revenue deficit, social sector programmes such as the National Rural Employment Guarantee Scheme and funding of infrastructure projects.

On the impact of the global crisis on India’s small and medium enterprises (SMEs), Dr. Singh admitted that there were concerns and stressed that the sector needed liberal assistance and low-cost credit to ensure that “large-scale retrenchment does not become the order of the day.”

Expressing satisfaction at the outcome of the G-20 meeting in Washington on November 15, Dr. Singh said that hopefully, “a beginning has been made” to correct the international financial architecture and tackle the financial crisis. He pointed out that since the developing countries were the “worst victims” of a crisis not of their own making, the developed countries have the responsibility to ensure that the burden “does not fall disproportionately” on the shoulders of the weak.

As for ways of averting such crises in the future, Dr. Singh said: “We need a global safety net so that the poor of the world do not pay a price for the profligacy of the rich and the delinquency of a few. Global problems require global solutions. This is the most important lesson of the past century for the next … The global institutions of governance must be made more inclusive and representative. The voice of the developing world must be heard in the high councils of global decision-making … In both good and bad, in prosperity and peril, in opportunity and crisis, we must recognise the new inter-dependencies. No nation is an island unto itself.”

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