New Delhi:
Prime Minister Manmohan Singh urged business leaders on Wednesday to keep faith in his government's efforts to improve a dire investment climate.
Dr Singh said the downturn that has dragged growth to a decade-low of around 5 percent is temporary and the mood among businessmen overly pessimistic. He was addressing the nation's top business persons at the annual gathering of the Confederation of Indian Industry or CII.
"We must prove the prophets of gloom are wrong," the Prime Minister said. "I would urge Indian industry to have faith in our determination and avoid getting swamped by a mood of negativism." (Read)
Dr Singh launched a series of reforms late last year, but the economy is still struggling to refind momentum.
With the DMK, an important ally, exiting his coalition last month, the PM could find it challenging to introduce other reforms that are politically unpopular, like allowing more foreign investment in the insurance sector.
He acknowledged "bureaucratic inertia" and corruption were problems for investors, but said rates of economic growth above 8 percent were possible if government and industry worked together.
The government needed to act forcefully to reverse the slump and balance the macro-economy, Dr Singh said, but he also called on industry to do more to revive investment, which is estimated to have hit a five-year-low in 2012/13.
"Government is not the prime driver of growth ... the driver of growth is private investment," he said.
Red tape and regulatory hurdles are often cited as obstacles to investing in India. The World Bank ranks India 132 in terms of "Ease of Doing Business."
Dr Singh did not lay out any specific policies, but promised fast action to fix shortages of fuel for power companies, one of the most thorny issues facing Indian businesses. He said the government was also preparing to clear 31 oil blocks for production and exploration in the next two weeks.
Dr Singh said the downturn that has dragged growth to a decade-low of around 5 percent is temporary and the mood among businessmen overly pessimistic. He was addressing the nation's top business persons at the annual gathering of the Confederation of Indian Industry or CII.
"We must prove the prophets of gloom are wrong," the Prime Minister said. "I would urge Indian industry to have faith in our determination and avoid getting swamped by a mood of negativism." (Read)
Dr Singh launched a series of reforms late last year, but the economy is still struggling to refind momentum.
With the DMK, an important ally, exiting his coalition last month, the PM could find it challenging to introduce other reforms that are politically unpopular, like allowing more foreign investment in the insurance sector.
He acknowledged "bureaucratic inertia" and corruption were problems for investors, but said rates of economic growth above 8 percent were possible if government and industry worked together.
The government needed to act forcefully to reverse the slump and balance the macro-economy, Dr Singh said, but he also called on industry to do more to revive investment, which is estimated to have hit a five-year-low in 2012/13.
"Government is not the prime driver of growth ... the driver of growth is private investment," he said.
Red tape and regulatory hurdles are often cited as obstacles to investing in India. The World Bank ranks India 132 in terms of "Ease of Doing Business."
Dr Singh did not lay out any specific policies, but promised fast action to fix shortages of fuel for power companies, one of the most thorny issues facing Indian businesses. He said the government was also preparing to clear 31 oil blocks for production and exploration in the next two weeks.
© Thomson Reuters 2013
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