Observing that infrastructure deficit was posing a major constraint to India’s growth, Prime Minister Manmohan Singh on Monday said an outlay of over $ 1 trillion was envisaged for infrastructure projects during the next 5-year plan beginning 2012 and invited Japanese firms to play a greater role in this endeavour.
Dr. Singh said his government was determined to continue the economic reforms to create a favourable investment environment and facilitate higher capital inflows and push the reform of both direct and indirect taxes with the aim of unifying indirect taxes into a single Goods and Services Tax in due course.
Addressing a business luncheon attended by top business leaders from India and Japan, he noted that India’s growth, which fell to 6.5 per cent in 2008-09 because of the global economic recession, recovered to 7.4 per cent in 2009-10 and is projected to be 8.5 per cent in 2010-11.
He hoped that India will return to 9 per cent growth in 2011-12.
“I am confident that strong fundamentals of the Indian economy will enable us to achieve our objective of double-digit growth in the coming decades,” Dr. Singh said.
Underlining that he was not underestimating “many challenges” that are faced in achieving such high level of growth; he said “we need to close the infrastructure deficit, especially in the power, transport and communication sectors.
“This is a major constraint on our development and we will give high priority to infrastructure development in the years ahead.”
Dr. Singh said that India’s investment needs will be at least $1 trillion, part of which will come from within but “we expect Japanese companies to also provide their support.”
He said during India’s next five-year plan from 2012 to 2017 “we envisage financial outlays of over one trillion US dollars on infrastructure projects.”
Private investment will play a large role in achieving this target, Singh said, while asking Japanese companies to play a much greater role in development of India’s economy.
From India, Mukesh Ambani, Reliance Industries Chairman and Managing Director; Sunil Bharti Mittal, Bharti CMD; Fortis Chairman Malvinder Singh; and HDFC Chairman Deepak Parekh were among those present at the luncheon.
