Economy is all set to enter a much better phase: PM

Admitting government's failure to contain inflation, Prime Minister Manmohan Singh on Friday said high prices have helped farmers and asserted the country was heading for better times.

". . .we have also not been as successful in controlling persistent inflation as we would have wished.

"This is primarily because food inflation has increased.

"However, we should remember that our inclusive policies have put more money in the hands of the weaker sections", Singh said while addressing a press conference, the third as Prime Minister.

The worry about inflation, he added, "is legitimate but we should also recognise that incomes for most people have increased faster than inflation."

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While making a case for increasing supplies and improving marketing and logistics to contain food prices, especially of perishables like fruits and vegetables, he stressed "much of this work lies in the domain of the states."

As regards the growth, which has slipped to decade's low of 5 per cent in 2012-13, the Prime Minister attributed the slowdown to global factors but exuded confidence that the growth momentum would revive in the coming years.

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"We are set for better times.

"The cycle of global economic growth is turning for the better. Many of the steps we have taken to address our domestic constraints are coming into play.

"India’s own growth momentum will revive", he added. He said that during the term of UPA, India for the first time in its recorded history, witnessed a sudden acceleration of economic growth to 9 per cent.

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"This exceptional performance was followed by a slowdown initiated by the global financial crisis.

"Over the past couple of years, all emerging economies have experienced a slowdown.

"India was no exception", he added.

Singh further added that it was not just the acceleration of growth that "gives me satisfaction.

"Equally important is the fact that we made the growth process more socially inclusive than it has ever been."

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Expressing the government's commitment to economic reforms, Prime Minister said ‘so long as we are in power we will continue to push for reforms. . .our government attaches highest priority to reforms.

“. . .we will continue to implement our policies, with vigour and commitment, aiming to revive growth, promote enterprise, generate employment, eliminate poverty and ensure the safety and security of all our people, particularly women and children.”

India, he further said, “provides a hospitable environment for foreign direct investment.

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“We will continue to improve our practises wherever needed.’

Observing that over the past decade economy has gone through many ups and downs, Singh said, "we should not focus overtly on the short term."

Citing the achievements of the government, Singh said that in 2004 it tried to give "a New Deal for Rural India" and pursued farmer friendly policies including raising support prices, expanding credit to farmers, and increasing investment in horticulture, rural development, and rural infrastructure, especially roads and electricity.

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He further said that the Mahatma Gandhi National Rural Employment Guarantee Scheme has assured agricultural labour of a floor and has increased their bargaining power, besides improving delivery of health and education services.

Because of the policies pursued  by the government, he said, percentage of the population below the poverty line has fallen much faster in the period 2004-2011 than it did in the previous ten year period and that the number of people below the poverty line has come down by 13.8 crore (138 million).

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Referring to the issue of job creation, Singh said the government had not been able to do as well as it would have liked to and was working 'hard' to improve the situation.

"I am concerned that we have not been as successful as we need to be in generating employment in the manufacturing sector.

"This is an aspect of performance which we are working hard to correct.

"We need a much stronger effort in support of small and medium enterprises which can be a major source of good quality employment. Our manufacturing strategy gives high priority to this objective for the future."

Hoping that the Food Security Act would to some extent shield the common man from rising food prices, he said, real wages in rural areas have increased faster than before and also the per-capita consumption in both rural and urban areas had increased significantly.

As regards the impact of external situation on domestic economy, the Prime Minister said, "the one lesson we shall all learn from our experience over the past decade is that the world around us is becoming more challenging.

"This is both a function of our greater integration with the world and of the international community’s expectations from a rising India. This is India’s manifest destiny. "We should recognise it as such and learnt to deal with it."

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