High savings and investment rates can step up India's growth to over 10 percent with right policies though some global developments may impact capital flows.
NEW DELHI: High savings and investment rates can step up India's growth to over 10 percent with right policies though some global developments may impact capital flows, Prime Minister Manmohan Singh said here Wednesday.
"It is possible that with correct set of policies and dedicated effort by both the central and state governments, we will not only maintain this momentum of high growth but may be able to raise it to 10 percent," Manmohan Singh said.
"The high growth rate has become possible because of historically high savings and investment rates," the prime minister told the 54th meeting of the National Development Council (NDC), which is meeting to approve the Rs.36.44 trillion ($910 billion) 11th Five Year Plan.
"Our savings rate after stagnating for almost two decades has touched 34 percent of GDP (gross domestic product) and the investment rate has crossed 35 percent," the prime minister said.
"These are likely to go up in future because of our young population profile," he added at the meeting attended by chief ministers, lieutenant governors, key union ministers and Planning Commission Deputy Chairman Montek Singh Ahluwalia.
The prime minister also dwelt on the current turmoil in the global economy but added that while these could have an impact on the Indian economy, it cannot derail it completely because of the inherent resilience.
"There are some clouds on global financial markets after the sub-prime lending crisis. There are worries that the growth of the US and other leading economies may slow down and some may even go into a recession," he said.
"This is not to say we must be pessimistic and less ambitious in growth targets. It only implies that we need to redouble our efforts to maintain the domestic drivers of growth and ensure policy facilitates faster growth," he said.
"Our economy has demonstrated resilience in meeting the challenges posed by globalisation. In the last two decades, our industry - both large and small - has restructured and become globally competitive."
The 54th NDC meeting comes in the backdrop of the Indian economy registering a growth of over 7.5 percent during the 10th plan and with the target of scaling it up to over nine percent in the ensuing five years.
"Towards Faster and More Inclusive Growth" is the central theme of the plan that runs from 2007-08 to 2011-12 and seeks to lower poverty by 10 percentage points, generate 70 million new jobs and reduce unemployment to less than five percent.
After several months of hectic deliberations, the Planning Commission and the Union Cabinet had approved the draft Five Year Plan, and the NDC is expected to give it an operational go-ahead Wednesday.
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