India is committed to getting back to a sustainable growth path of 8 to 9 per cent, Prime Minister Manmohan Singh has said, adding that such a target is achievable because the fundamentals of the Indian economy remain strong.
Addressing the CEOs forum in New York on his return from Washington, following a summit meeting with United States President Barrack Obama, Dr Singh said that the Indian people ‘will not tolerate anything less’ than this rate of growth as they have tasted the benefits of rapid inclusive economic growth and they want more, not less.
He admitted that the business community in the United States has some concerns about India’s growth prospects, macroeconomic stability and the economic policy environment.
“Doubts have been expressed about our sincerity in this regard. This is a mistaken perception. I would like to use this meeting to correct it, if I can, and also to understand your points of view,” said the PM.
The CEOs meeting included some 16-odd CEOs, including Indra Nooyi, CEO of Pepsico and Ajay Banga, president and CEO of MasterCard. It was held at New York Palace Hotel in midtown Manhattan. Among others present was Ron Somers, chairman of the US-India Business Council, besides CEOs of some American companies.
Dr Singh said that India’s overall public-debt to GDP ratio has been on a declining trend from 73.2 per cent of GDP in 2006-07 to 66 per cent in 2012-13. Similarly, India’s external debt is only 21.2 per cent of GDP and short-term debt stands at 5.2 per cent of GDP.
India’s forex reserves, he said, stand at over US$270 billion, and are more than sufficient to meet India’s external financing requirements.
“In order to restore growth, our government has implemented a series of reform measures over the last year. We have established a special mechanism to speed up implementation of large projects, especially in the infrastructure sectors. Several decisions have been taken to remove impediments in the way of important projects. We have taken steps to make India more attractive for Foreign Direct Investment. FDI limits have been increased in several sectors, including retail and telecom, and restrictions in the banking sector have been eased. The policy regarding FDI in defense has been clarified to indicate that FDI beyond 26 per cent can also be considered on merits,” Dr Singh said.
“The results of our efforts will be visible in the second half of the year. We expect stronger growth in 2013-14 than in 2012-13. The second half of the year should see a distinct turnaround, partly because of the good monsoon and partly because of the steps we have taken,” said the PM.
Singh also assured the CEOs that India is committed to the protection of intellectual property and recognises that investment and innovation in a country requires such protection.
“We have strong IPR legislation in India, consistent with our WTO obligations. We are continually trying to strengthen the enforcement mechanisms,” he said.
“I would like to use this opportunity also to urge you to oppose efforts to create barriers for Indian IT companies through legislative or administrative measures. These companies are the most ardent champions of India-US relations. The IT and related services sector contributes 8 per cent of our GDP and 25 per cent of our exports. It employs three million people directly.
“The inability of IT companies to operate in the US market would not only affect our economy, but also the climate of opinion in India about the economic partnership with the US. Many US companies that have adapted to India, offering products and services that are competitive and innovative, have done very well. I hope you recognise the longer term opportunities that lie ahead,” the prime minister said.