New Delhi: It was disappointing that growth had slowed to five per cent but this was temporary and the government was taking corrective measures to get back to eight percent growth, Prime Minister Manmohan Singh said on Wednesday. Addressing the annual meeting of the Confederation of Indian Industry (CII), the prime minister said the government and business have to be partners in writing the story of development.
"We are seeing a temporary downturn, which does happen. We must recognise it as such and take corrective action. I do not believe our future is five per cent growth. We grew at an average of about eight per cent in the last 10 years and we can get there again," he said.
He said consensus today was that unless the government acts swiftly, growth that has already decelerated, would be perennially stuck at five per cent.
According to Manmohan Singh, the Indian economy was driven by the private sector with 75 per cent investment.
Asking industry to have faith in the government and not get swayed by negativity, Manmohan Singh said: "In my last address in 2007, I chose to strike a contrarian note. When everything seemed to be going exceptionally well, I struck a note of caution."
"I propose to strike a contrarian note again. If the business mood was unduly optimistic in 2007, I think it is unduly pessimistic today," he said.
He said the world was affected by the global downturn in 2008. The prime minister said corruption and inertia in bureaucracy were problems; managing a coalition was not easy but these were not issues that have risen suddenly and were there even when India was growing at eight percent.
"We are seeing temporary downturn which happens time to time. We must act and take corrective action. If we go back 15 years, our average growth was 7.5 per cent and this kind of dynamism doesn't disappear suddenly," he said.
According to Manmohan Singh, the Indian economy was driven by the private sector with 75 per cent investment in private sector and it needs to be corrected to ensure truly inclusive growth.
He said the problem was due to the global downturn. "The world recovered from 2008 crisis and now is stumbling from debt crisis in eurozone. There has been negative growth in Europe and zero growth in Japan."
The prime minister said the government was taking domestic measures to deal with the crisis. "We can act forcefully to remove the many domestic constraints that have arisen to get the economy to perform at full potential," he said.
"I am encouraged by the progress that we have made in the last three months by the work of Cabinet Committee on Investments. The committee has made a difference in speeding up clearances (for projects)," he said.
"The real message of the experience with the 11th Plan is that we not only grew at an average rate of eight percent, our growth was more inclusive. If we did it in the 11th Plan, there is no reason why we cannot do even better in the 12th Plan," he added.