New Delhi: Conditions were favourable for India to achieve and sustain economic growth of 9-10 per cent, although it required an increase in savings and investment rates, Prime Minister Manmohan Singh said on Tuesday.
India has grown at an average of 8.6 per cent over the past four fiscal years, and is poised to grow at a similar pace in the 2007/08 fiscal year, which ends in March.
"It has been a good year for the Indian economy, for our working people and our entrepreneurs. The conditions are today favourable to achieve and sustain 9-10 growth rate," Singh said at a function for India's large expatriate community.
"The ambitious growth rate that we seek to achieve will require determined efforts to raise our savings and investments rates. The bulk of resources for India's development must come from home." India's savings rate has reached 34 percent of gross domestic product and the investment rate has crossed 35 per cent.
The government expects these high rates to rise because of India's young population profile. Singh was speaking at the annual "Pravasi Bharatiya Diwas", which honours prominent expatriate Indians and also taps the community for investments.
Globally, expatriate Indians have an estimated $1 trillion in assets, and wealth managers in Singapore, Dubai, Hong Kong and elsewhere have been stepping up efforts to help manage it.
Opportunities
India, Asia's third-largest economy, grew 9.4 per cent in the 2006/07 fiscal year, its strongest in 18 years and second only to China among major economies. Annual growth dipped to 8.9 per cent in the September quarter, falling below 9 per cent for the first time in three quarters, as industrial output slowed due to monetary tightening measures designed to trim inflation.
But policy makers are confident of maintaining growth momentum despite a surge in the value of the rupee against the dollar, higher interest rates and record global crude oil prices.
India's surging expansion and record-setting stock market has pushed firms to expand capacity and drawn global investors. Singh said his government wanted to create a framework, which would provide profitable opportunities for expatriates to invest in India's development.
He urged community leaders to develop better coordination with the country's diplomatic missions. "This message is specially relevant today as we see growing violence in many parts of the world where our communities are settled," Singh said.
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