Manmohan Singh pegs growth of economy at 5%

Prime Minister Manmohan Singh today pegged the growth of the Indian economy at five% for the current fiscal.

The government's decisions on infrastructure and fiscal reforms have started making impact and India is "re-emerging" as an attractive investment destination, he said. "Our economy has done well over the past decade. In the nine years since 2004, we averaged a healthy growth rate of 7.9% per annum. There has been no doubt a slow down in the recent past, and we will probably end this year at the same level as last year with 5% growth," Singh said.

Addressing the 12th Pravasi Bharatiya Divas here, the Prime Minister said a number of international as well as domestic factors have contributed to this situation. "Despite these challenges, our economic fundamentals remain strong. Our savings and investment rates are still over 30% of our GDP and the entrepreneurial spirit in India is very much alive and kicking," he said.

In recent months, Singh said the government has also taken a "very wide range" of decisions to accelerate the implementation of mega infrastructure projects, reform tax administration, improve fiscal management, liberalise foreign direct investments and rationalise the system for allocation and utilisation of natural resources.

In an apparent reference to the logjam in Parliament and opposition to fiscal reforms by some quarters, he said, "With greater political support, we could have legislated deeper reform measures - for example, in the financial and insurance sector. "However, our decisions are already beginning to make an impact and India is re-emerging as an attractive investment destination. I am confident you will see the evidence clearly in the next few months," the Prime Minister said.