ibnlive » India

Dec 27, 2012 at 11:42am IST

India will take another 20 years to become a middle-income economy: PM

New Delhi: Scaling down growth rate for the 12th Five Year Plan to 8 per cent from 8.2 per cent earlier, Prime Minister Manmohan Singh on Thursday said that the country was facing many challenges to achieve sustainable growth. Singh insisted that the priority of his government right now is to reverse the slowdown.

Seeking support of states, the Prime Minister said that for growth, policy innovations are must. "If growth will slow down, it will be difficult for the states and the Centre to implement inclusive growth," he said at the meeting of the National Development Council (NDC) in New Delhi on Thursday.

Noting that poverty in the country was declining at a rate of 2 per cent every year, Singh said India was reaching a stage where the term "BIMARU States" can be relegated to history. "Poverty declined at faster rate since 2004, at the rate of 2 per cent every year," he said.

Singh said that energy was under-priced in India and therefore there was a need that "some phased increase in energy prices is necessary". About the water resources, he said that the management of water resources faced challenges and it was necessary that it was regulated.

Emphasising on the agricultural growth, the Prime Minister said that the development of the agricultural sector has always been his government's priority. "Agriculture is of prime importance for our government. Improvement of agriculture is essential for growth of the country," he said adding "agricultural growth accelerated from 2.4 per cent in the 10th plan to 3.3 per cent in the 11th plan."

Singh said to achieve growth, it is necessary that both the Centre and the states create an environment where industries can grow. "Growth in manufacturing should be in double digits but it is yet to happen," he said. He also said that as both the Centre and the states face resource constraints it was required "to increase the tax ratio as a percentage of GDP".

"Determined efforts needed to raise resources for funding the 12th Plan; early implementation of GST required," he said. The Prime Minister said that India was still a low-income country and for it to emerge even as a middle-income economy, 20 years of rapid growth was necessary.

Talking about the government's new scheme - Direct Cash Transfer - Singh said that there have been complains about corruption in government programmes and therefore Aadhar-based Direct Cash Transfer scheme has been planned. He said that the new scheme would be launched by January 2013. About subsidies, he said that "subsidies should be well designed and kept under fiscal limits".