India has right foundation to grow 9-10 percent: PM

June 30th, 2011 - 12:55 am ICT by IANS  

Manmohan Singh New Delhi, June 29 (IANS) Prime Minister Manmohan Singh Wednesday said his government is not only committed to an inclusive growth of 9-10 percent but also believes the country has the right macro-economic foundation for such a high expansion.

“We are committed to a growth rate of 9 to 10 percent per annum,” the prime minister said in his introductory remarks during an interaction with a select group of print editors.

“We can do it,” the prime minister said, adding: “We showed that in 2008 when most people believed that our financial system would also be a victim of the global financial crisis.”

According to him, India’s savings rate is around 34 to 35 percent of its gross domestic product (GDP) with an investment rate of 36 to 37 percent.

“With a capital output ratio of 4:1, we can manage to have a growth rate of 9 percent,” he said. Capital output ratio examines the amount of money and resources required to produce additional output at factories, farms and other work places.

The prime minister also said that the country continued to grow fast despite the global economic crisis since 2008, often described as the gravest in eight decades, since the government and other institutions put in place the necessary corrective measures.

“We must have the vision, the ability and the determination to prosper even when the world environment is hostile,” the prime minister said.

“Because nature has blessed us with a large common market, if we can put in place the goods and services tax legislation and if we can remove barriers to interstate commerce that itself will create new opportunities internally for accelerating the tempo of growth.”

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