India aims to quickly attain double-digit growth as it pulls out of the worst global financial slump in decades, an Indian minister told an international business audience yesterday.
Indian Minister of Finance Pranab Mukherjee’s upbeat projections to the India World Economic Forum assembling some 700 delegates from around the world come as industrialized economies are still struggling to emerge from the financial crisis.
Mukherjee said India’s economy was “on a path to rapid recovery” with the latest quarterly data showing expansion of 8.8 percent.
Photo: AFP
“The challenge now is to quickly revert to the high GDP growth path of 9 percent-plus and even find the means to cross the double-digit growth barrier in the coming year or two,” the minister said at the meeting’s opening session.
To achieve this goal, he said India needs much more foreign investment, especially to upgrade India’s shabby infrastructure that economists say lops two percentage points off yearly growth.
India says it needs 9 percent to 10 percent growth to make any significant reduction in deeply entrenched poverty. More than 40 percent of Indians still live below the extreme poverty line of US$1.25 a day, compared with 16 percent in China, according to the World Bank.
Mukherjee said the government aimed to double infrastructure investment to US$1 trillion in the country’s next five-year economic plan to 2017 and has eased foreign investment rules to make it easier for foreigners to invest.
So far, India is on target in its infrastructure spending but needs much more money in coming years and this represents an “exciting opportunity” for global investors, Mukherjee said.
Foreign investors have expressed concern about putting money into Indian infrastructure projects because of bureaucratic red tape in winning approvals for projects, massive cost overruns and missed deadlines.
India currently invests about 6 percent of its GDP on infrastructure — just over half the 11 percent spent by fellow emerging market giant China.
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