Tough times, but we shall overcome, says PM

Pranab urges NRIs to take a lesson from overseas Chinese

Prime Minister Manmohan Singh on Sunday predicted a 7 per cent growth rate for the current fiscal year, noting that the country was passing through “difficult times”.

However, he was optimistic that the economy will return to a higher trajectory of 9-10 per cent in the medium term backed by strong fundamentals even as Finance Minister Pranab Mukherjee sought more contribution from the overseas Indians towards building a modern India.

“Our country is going through difficult times ... We are up to the task of meeting these challenges we face as a nation,” the prime minister said, while addressing the 10th Pravasi Bharatiya Divas being attended by over 1,900 overseas Indians.

Despite an adverse international environment, Singh said: “The Indian economy is expected to grow by about 7 per cent this financial year ending March 31.”

The country recorded a Gross Domestic Product (GDP) growth rate of 8.5 per cent in 2010-11 and was initially estimated to grow by 9 per cent in the current fiscal. The growth rate projection, however, was scaled down gradually by the Reserve Bank as well as the Finance Ministry.

The prime minister, however, exuded confidence that the growth rate in the coming years would go up to 9-10 per cent as the “economic fundamentals are strong and constitutional processes are robust”. “We hope to bring back the rhythm of our growth process to sustain an annual growth rate of 9-10 per cent in the medium-term. Our domestic savings rate which currently stands at 33-35 per cent of our GDP will greatly facilitate the realisation of our growth objectives,” he said.

Singh also said that efforts to combat inflation have started yielding results and there has been an improvement in the situation.

Fulfilling a long-standing demand, Singh said a pension and life insurance scheme for overseas Indian workers is being introduced. This will benefit over 50 lakh workers, especially those in the Gulf. The scheme was recently cleared by the Union Cabinet.
Asking NRIs to invest more in India, Mukherjee said though there have been large ticket investments by the diaspora, it was much less than the potential.

To achieve this, an alternate model that was more balanced and holistic needed to be pursued, he said.

Citing the example of China, he said India, too, needed to fully tap the investment potential of NRIs and their entrepreneurial skills and promote inclusive growth. “We have not yet reaped the full benefits of India’s great diaspora. The most obvious area remains that of investment and entrepreneurship. For instance, in China a large chunk of foreign direct investment has come from overseas Chinese,” he told over 1,900 delegates from 60 countries.

Though there have been “large ticket investments” by NRIs and PIOs, the finance minister said, “it is far less than the potential and perhaps too concentrated on the formal sector. Rather, we must pursue an alternative model. One that is more balanced and holistic in a socio-economic sense”.

Overseas Indians, he said, should increase their contribution in social and economic areas like education, healthcare, and skill development and supplement the efforts of the government to promote inclusive growth.

The non-resident Chinese have been playing a major role in the development of China and invest substantially in the domestic economy.

Mukherjee said India does not require just financial contributions from its diaspora, but dedication of time, ideas and endeavour.

On the economy, he said, “Though we have witnessed ups and downs, this period has transformed our country and catapulted it into the centre stage in the world...We are widely recognised as a major driver of global growth,” he said.