Have faith, the Prime Minister told India Inc today, saying the slowdown in growth is "a temporary downturn in the economy, we will prove the Prophet of Doom wrong" and also noting that the business mood in the country is "unduly pessimistic".
Dr Manmohan Singh was speaking in Delhi at a gathering of some of the country's top business persons at the annual meeting of the Confederation of Indian Industry (CII).
He admitted to shortcomings, saying that the investment environment could be better, that "for a variety of reasons, government decisions have been delayed," and also that there has been a "hesitation on part of officials to take strong decisions," but emphasised that his focus was on the corrective measures that he says his government is taking to revive a lethargic growth rate of 5 per cent, the slowest pace in a decade and a far cry from a near double-digit growth seen in the early 2000s. "I do not believe our growth can only be 5 per cent. We can get back to grow at 8 per cent," the PM said.
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Corruption and inertia, he acknowledged were problems, but said these "were there even when we working at 8% growth".
So, Dr Singh said, "I propose to strike a contrarian note once again. If the business mood was unduly optimistic in 2007, I think it is unduly pessimistic today. This needs correction. Let me explain. In 2007, I often heard that the government has become irrelevant since the country will grow at 9 per cent no matter what the government does. The consensus today is that unless the government acts swiftly, our growth, which is swiftly decelerating, will be perennially stuck at 5 per cent. Naturally, I welcome the rediscovery on the part of business on the importance of the government."
He sought partnership with corporate India acknowledging that this is a private-sector led economy and promised to reverse a sluggish investment climate in the country. India, he said, must also welcome foreign investment and that the government is reviewing the FDI policy to give it more boost.
Dr Singh's minority government has been even more fragile since key ally DMK pulled out last month. Mulayam Singh Yadav, whose Samajwadi Party provides essential external support to the coalition, has been warning of early elections. Dr Singh today noted that "managing coalitions is not easy".
The CII will be addressed tomorrow by Congress vice-president Rahul Gandhi, his first public speech since he was formally declared No 2 in his party's hierarchy in January. His mother, Sonia, is Congress president.
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