NEW DELHI, Oct 7: India’s Prime Minister Manmohan Singh said the country needs to spend $320 billion by 2012 to improve its creaking infrastructure, accelerate economic growth and tackle poverty.

“Our growth potential will be realised only if we can ensure that our infrastructure does not become a severe handicap,” Singh told a conference on infrastructure in New Delhi.

“The quality and capacity of our infrastructure is certainly a matter of concern to one and all,” the prime minister said.

Singh added substantial private sector investment would be needed to deal with India’s infrastructure “deficit”.

He said road, rail, air and water transport, electric power, telecommunications, water supply and irrigation needed investment of about $320 billion between 2007-12.

Singh singled out the country's power sector as one of the biggest economic trouble spots and asked India’s states to take immediate steps to make the sector financially viable.

He said high transmission and distribution losses accounted for almost 40 per cent of the electricity produced.

“No civilised society, nor a functional commercial entity, can sustain losses on such a scale,” he said.

He said a growth rate of 10 per cent could be achieved with sustained efforts to improve the reliability of power supplies, boost agriculture and manufacturing growth.

India’s economy grew by 8.4 per cent in the financial year to March 2006 and expanded by a better-than-expected 8.9 per cent in the first quarter of the current year.

Singh stressed the need for a faster and more inclusive growth process.

“If we have to make a decisive impact on poverty and provide productive employment for our young population, we must further accelerate the pace of growth to nine to 10 per cent.”

Economists say that country needs faster growth to significantly improve living standards in India where some 290 million out of the population of 1.1 billion live in poverty, according to the World Bank.—AFP