Indian Prime Minister Manmohan Singh on Saturday warned against economic "negativism", insisting that the growth slowdown in Asia's third-largest economy was a "short-term phenomenon". India's economy has slowed under the brunt of a dozen interest rate rises, which have driven up borrowing costs and dampened demand, while a faltering US recovery and the eurozone debt crisis have cast a further pall.
Singh told a meeting in New Delhi to discuss the country's economic roadmap for the next five years that "the current slowdown is a matter of concern". "Renewed uncertainty in the global economy due to sluggish US growth and worsening of the eurozone sovereign debt crisis and weak business sentiments and persisting high inflation at home poses considerable challenges to the task of making a five-year plan," Singh said. But "we must guard against the mood of negativism that seems to have gripped the country," he added. "The future is what we make of it. Nothing is ordained or pre-determined. India can rise, but India can also falter. We live in a world of rising and faltering economies."
India's Planning Commission has projected that the gross domestic product will expand by an average of nine percent in the next five years from 2012 to 2017, up from 8.2 percent estimated in the 11th Plan. Despite moves to free up its economy, India still runs on five-year plans introduced in 1951 by its first premier, Jawaharlal Nehru, who admired the Soviet Union's central economic planning model.
Singh said it was "relevant" to ask whether nine percent growth was "feasible since the economy is currently slowing down." But he said the deceleration "should be seen as a short-term phenomenon, reflecting highly unsettled conditions in the global economy."
"Growth rates are being revised downwards in all countries for the current year," he said. Senior government officials now project expansion of close to eight percent in the financial year to March 2012, after the economy grew 8.5 percent last year. Such numbers are robust by Western standards, but too slow to fulfil government pledges of significant poverty reduction and to create enough jobs for a soaring young workforce in the country of 1.2 billion. Singh added India needed to do more to ensure growth embraced its hundreds of millions of poor citizens.
"A criticism often advanced is that while we have delivered high growth, we have not done nearly as well on inclusiveness," Singh said. "There is some truth in this criticism, in the sense that we should have done better. However, it is not true to say that progress on this front has not been significant." A media report Saturday said poorer sections of society were catching up with the rest of the country on important human development indices such as literacy, infant mortality rates and child labour.
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