Los Cabos: As the initial euphoria about Greece elections died down, the economic crisis took centre-stage. Prime Minister Manmohan Singh addressed some critical issues relating to the slowdown in India's economy in his address during the Plenary Session of the seventh Summit of the Group of 20 developed and developing countries.
"Like other countries, we too allowed the fiscal deficit to expand after 2008 to impart a stimulus. We are now focusing on reversing the expansion. This will require tough decisions, including on controlling subsidies, which we are determined to take," Singh told the galaxy of world leaders including US President Barack Obama.
Concerned over the dip in India's economic growth, Singh said the public in the country was "impatient" for a return to high growth and faster jobs creation. He also said that steps were being taken to revive investor sentiment in the country.
India is targeting a fiscal deficit of 5.1 per cent of GDP for this fiscal year. But a higher subsidy bill and lower tax revenue have resulted in its fiscal projections for 2011-12 go awry. The fiscal deficit was 5.8 per cent in 2011-12, wider than the initial target of 4.6 per cent.
The country's growth slowed to a nine-year low of 5.3 per cent in the fourth quarter of 2011-12. Referring to the slowdown in India like other emerging economies, the prime minister acknowledged that internal constraints had also affected performance and that the government was working to correct them.
"The global downturn and especially the impact on capital flows have played their part. Internal constraints have also affected performance and we are working to correct them," he said.
The Prime Minister further expressed confidence on boosting the growth rate back to 8-9 per cent per annum.
"Our growth rate in 2011-12 declined to 6.9 per cent from the level of 8.4 per cent in the previous year. This may look like a reasonable figure, given growth rates being experienced in the rest of the world, but our public is impatient for a return to high growth and faster jobs creation.
"The fundamentals of the Indian economy remain strong and we are confident of bringing back the rhythm of high growth of 8-9 per cent per annum," Singh said.
The prime minister also spoke about the investments to India being affected by the adverse global climate which impacts both foreign and domestic investors. "We are taking steps to revive investor sentiment. We are determined to create an environment that would boost investor sentiment and promote an atmosphere conducive to enterprise and creativity," he added.
In this context, Singh said the policies will be transparent, stable and designed to provide a level playing field to both domestic and foreign investors.
Singh told the world leaders that India is focusing heavily on infrastructure investment and has set ambitious targets to keep this on track and also put in place a problem resolution mechanism to overcome implementation bottlenecks. The prime minister stressed that there should be a focus on investment in infrastructure as it has found resonance as a means of stimulating global growth at the G-20 deliberations, with both developing and developed countries responding positively.
In the context of controlling subsidies, Singh referred to a landmark effort underway in India to provide unique identity numbers (UID) for all residents which would have biometric data.
The G20 summiteers were told that this massive database covering over a billion people will facilitate delivery of a whole range of financial and other services, through effective targeting and reduced linkages in subsidy schemes.
(With additional information from PTI)