The storm buffeting the global economy might blow many a rich nation into a severe recession which could incapacitate developing countries too. So how can India insulate itself from the ill-effects of this approaching tempest? Prime Minister Manmohan Singh has a prescription. "We have to ensure that the ill winds from abroad do not affect the growth processes in our country adversely. For that it is very essential that we maintain the tempo of investment; particularly in the infrastructure sector, in agriculture, and in energy-saving technologies."
He was addressing a press conference onboard Air India One while returning from Pretoria having attended the 5th IBSA Summit there.
Dr Singh was sanguine that India would be able to ride these winds and emerge fairly unscathed. "I am confident," the prime minister said, "that just as in 2008 we showed to the world that we can swim against the wind blowing from abroad, it is still possible for India to maintain a healthy growth rate of about 8 to 8.5 per cent despite the adversity of the international environment."
"Getting rid of chronic poverty, ignorance and disease, which still afflict millions of people in our country, is the most important task and to achieve that goal we have to walk on several legs," the prime minister said.
India has to ensure that its economy grows fast enough and the 12th Five-Year Plan has set the target of about 9 per cent growth rate. "It is difficult in the present world situation but we believe it is achievable," he said
"If we simultaneously a lay lot more emphasis on infrastructure, education, health, skill-development, we will create an environment where the youthful population profile that we have will ensure not only higher growth rates, but also jobs of productive quality for young men and young women who would be joining the labour force," the prime minister said.
Agreeing that factors of demand-supply mismatch are creating an inflationary environment, he said that the rise in global energy prices and the depreciating exchange rate have further complicated the task of controlling runaway prices.
To address the high rate of inflation, the government could make use of instruments -- such as the monetary policy, the fiscal policy, public distribution. The prime minister said a meeting on price rise was held a few days ago to understand the various forces that are "fuelling inflation and how we can bring inflation under control".
"I am confident by the end of the year you would see some positive results," he said.
On the Occupy Wall Street movement and the possibility of similar protests spilling into India, he said: "Peaceful protest is allowed... is a part of functioning of any democratic polity. And there are reasons why people are protesting. People are protesting in Wall Street, in Europe about the fat salaries that the bankers are getting when people are being asked to tighten their belts."
"There is problem of growing unemployment in United States. There is worry in Europe also. So, these are problems which the system must have credible answers to take them onboard. I think democracy provides outlet for people's frustrations, which I think is a very timely warning for all those who are in charge of the processes of governance," he said.
Looking ahead to the G20 Summit at Cannes in France early November, the prime minister said: "We expect the developed countries, particularly the Eurozone countries, to come up with credible measures to resolve the crisis of the sovereign debt which now is becoming a major global concern."
The prime minister also said that Brazil, India and South Africa are doing their part to promote growth while containing inflationary pressures and ensuring fiscal discipline.
At the IBSA Summit on Tuesday, the prime minister, along with Brazilian President Dilma Rousseff and South African President Jacob Zuma, had expressed concern at the ongoing deterioration of the global economic scenario that poses special challenges for the growth prospects of developing and poor nations.
The prime minister had urged the rich countries to take early and effective steps to prevent the global economy from slipping into a double-dip recession. He stressed the importance of the implementation of a credible plan of macro-economic and financial policies and structural reforms by the Eurozone countries, as a necessary step to prevent further negative shocks to the world economy.