NEW DELHI: India's premier Manmohan Singh said Saturday his government's new reforms to spur the economy were “only the beginning”, while lashing out at the “excessive pessimism” that he said is hurting growth.
Singh's scandal-scarred government has initiated a string of reforms to further open up sectors such as retail, insurance and aviation to foreign investment as it seeks to kickstart growth before facing voters in 2014 elections.
“The steps we have taken are only the beginning of a process to revive our economy and take it back to its trend growth rate of eight to nine per cent,” Singh told an audience of corporate leaders in New Delhi.
“Our government has acted to reverse the cycle of negative expectations and stimulate investment,” he said.
But “excessive pessimism at home” and a “less supportive” global environment have made the Congress-led government's task of reviving the flagging economy much tougher, he added.
India's economic growth slipped to a near-decade low of 6.5 per cent in the last fiscal year and is expected to fall to around 5.5 per cent this year.
While much of the world would envy such a growth rate, the pace is not enough for India which says it needs close to double-digit expansion to substantially reduce crushing poverty.
“Even as we make our growth process more inclusive, we cannot lower our guard in pursuing policies that restore growth momentum to the economy,” Singh said.
He said the government had taken tough decisions to rekindle investor enthusiasm and rein in the ballooning fiscal deficit which has brought warnings of a downgrade from global ratings agencies.
“Some of the decisions we have taken were politically difficult and the naysayers and the cynics have tried to halt us in our tracks,” Singh said.
Parties that have been fighting the reforms, including the main opposition Hindu nationalist Bharatiya Janata Party (BJP), “are either ignorant or constrained by outdated ideologies”, Singh said.
Last week the fragile minority coalition government succeeded in winning approval for its move to allow in foreign supermarkets – a flagship of its renewed reform agenda -- despite fierce political opposition.