Projecting an 8.5 per cent economic growth for the current fiscal, Prime Minister Manmohan Singh on Monday conceded that rising prices had brought distress to the common man, but exuded confidence that the “corrective” efforts of the Centre and the States would bring down inflation to about five or six per cent by the end of December this year.
At a press conference here to mark the completion of the UPA-II regime's first year in office, Dr. Singh said: “Prices continue to be a matter of deep concern. The government attaches the highest priority to containing inflation so that there is no distress to the common man. As a result of the steps we have taken, there are signs of prices showing a moderating trend.”
Moreover, the spurt in inflation over the last couple of years, Dr. Singh pointed out, was largely on account of the international crisis, especially high prices of petroleum products, and the bouts of floods and drought in various parts of the country.
“We will closely monitor the situation and, together with the State governments, take all corrective steps to bring down prices and protect the vulnerable sections of our society from the impact of high prices,” he said, and assured the nation that with the measures being taken “we can bring inflation down to about five or six per cent by December.”
Pointing to the global financial crisis in 2008 which threatened to push the world into a recession and the severe drought in 2009, Dr. Singh said the past couple of years had been exceptionally difficult for the Indian economy. “Inevitably, our first priority was to protect the economy from the global slowdown and ensure that the momentum of inclusive growth did not get interrupted. I leave it to you to judge how well we have done on this count.”
Despite these pressures, while the country's annual growth rate had averaged nine per cent for four years before the crisis, it reduced to 6.5 per cent in 2008-09 but recovered to 7.2 per cent in 2009-10. “We expect 8.5 per cent growth this financial year. This is widely regarded as one of the best performances among the larger economies of the world,” he said.
The Prime Minister said his government's medium-term target was to achieve a growth rate of 10 per cent per annum. “I am convinced that given our savings and investment rates [close to 35 per cent of the GDP, second only to China's 49 per cent], this is an achievable target. However, its achievement will require determined efforts to increase investment in social and economic infrastructure, enhance productivity in agriculture and give a fresh impetus to the manufacturing sector.”