As drop in investment slows India’s economic growth, Prime Minister Manmohan Singh on Saturday assured the global audience that the country was taking many more steps to increase investment for accelerating the pace of economy.
“We are initiating measures to spur investment and to make India more attractive to investors both at home and abroad. We have taken steps to fast track major infrastructure projects," Singh said while inaugurating the 46 Annual General Meeting of the Asian Development Bank here.
Between 2004–11, a period that includes the global financial crisis, India’s growth averaged 8.3 per cent per year. High growth and higher incomes added to demand, especially for food, electricity, and transportation. This growth outpaced new investment in power plants, roads, and coal production. As concerns over corruption slowed down approvals for new projects, supply bottlenecks became evident.
However, in the past few months, the government has taken steps to restore growth; for instance, laying out a plan to cut the losses of local power companies, creating the Cabinet Committee on Investment, and relaxing norms on foreign direct investment. Singh also spoke of Asia’s role in reviving global growth. "The Asian region is expected to play a crucial role in driving and stabilizing the global recovery process," he said.
Citing statistics, he said: “At purchasing power parity, emerging economies accounted for 80 per cent of the world growth in 2012, with emerging Asia accounting for a majority of it and China and India accounting for 35 per cent and 10 per cent of world growth respectively. This trend is only likely to continue in the years to come," the Prime Minister said.
Finance Minister P Chidambaram, in his address to one of the business sessions of the ADB, voiced similar sentiments, saying India was determined to boost investment – both domestic as well as foreign.
The gross fixed investment rate has declined from 32.9 per cent in 2007-08 to 30.6 per cent in 2011-12. Many projects are plagued by last-mile bottlenecks in fuel supply, environment clearance, forest clearance, and land acquisition, the finance minister said.
Chidambaram, who is also chairman of the ADB Board of Governors, said the government is determined to accelerate the pace of inclusive growth reiterating committment to fiscal consolidation.
