PM warns of sub-6% growth this year

Bets on strong fundamentals & policies to return to high-growth path

Prime Minister Manmohan Singh today warned that economic growth could fall below six per cent in the current year, which will be the lowest in a decade, from 6.5 per cent in 2011-12.

“From an impressive average annual GDP growth rate of over eight per cent between 2004 and 2010, our growth declined to 6.5 per cent in 2011-12 and may fall below six per cent in the current year,” he said, while inaugurating the 11th Pravasi Bharatiya Divas (PBD) here. The Indian economy has not been immune to the two major global financial crises, he said.

Economic growth slipped to 5.4 per cent in the first half of the current year from 7.3 per cent in the corresponding period of 2011-12.

The finance ministry, in its mid-year analysis, pegged the growth at 5.7-5.9 per cent for the entire 2012-13. Even the higher band of this range requires the economy to grow by 6.3 per cent in the second half.

The prime minister said, “Despite domestic constraints and challenges, the strong economic fundamentals, backed by sound policies, will enable us to return to a higher growth path. This is an imperative for the country, because India needs rapid growth and a healthy economy to meet the aspirations of an increasingly young India and make economic development more inclusive and sustainable.”

The government has taken a number of steps to boost domestic and foreign investment, accelerate project implementation and reform capital markets and the tax system, Singh said.

Among the most positive stories out of India in recent years are the acceleration in the rate of poverty reduction, stronger growth in the poorest states and improved productivity and increased real wages in the agriculture sector, he said.

“The government took a small first step to deliver benefits through direct transfer to beneficiaries, using the digital Aadhaar platform, which is an example of efforts to make growth more inclusive and government programmes more efficient and less vulnerable to leakages of various sorts.”

The government has launched an insurance scheme for workers, established welfare funds in embassies for distressed Indians, and created mechanisms to help vulnerable women abroad, he said. “The Comprehensive Economic Partnership Agreements and Social Security Agreements with a number of countries play an important role for protection and promotion of the rights and interests of Indian businesses, professionals and workers.” The theme for this year’s Pravasi Bharatiya Divas was Engaging Diaspora — the Indian Growth Story.

Vayalar Ravi, Minister of Overseas Indian Affairs, said the merger of the Overseas Citizen of India and Persons of Indian Origin cards could become a reality soon. The ministry has signed four social security agreements (SSA) with Finland, Canada, Japan and Sweden. SSAs with Austria and Portugal would be signed in a couple of months, he said in his address.

The ministry had also set up the Indian Community Welfare Fund (ICWF), which would be expanded to all missions abroad, he said. The scope of ICWF has been widened to include providing payment of penalties to release Indian nationals in prisons for no fault; providing support to Indian associations to establish Indian community centres; and providing support to start and run abroad community-based student welfare centres. The ministry also operates a 24-hour, toll-free helpline, called the Overseas Workers Resource Centre, in eight Indian languages, to assist intending migrants to get any information relating to visas, recruiting agents, foreign employment and also to register their grievances.

Mauritius President Rajkeshwur Purryag, the chief guest, said India and Mauritius had traditional ties and there was a huge potential for bilateral trade. He extended support for India’s claim for a permanent seat in United Nations Security Council.