Economy to grow by a little over 7%: PM

“We can,therefore,claim that we have entered the target range for growth set by Pandit Jawaharlal Nehru long ago. We moved away from the earlier paradigm of extensive government control,a suspicion of market forces and an extensive reliance on protection of domestic industry to an economy with much greater acceptance of the beneficial role of markets and greater openness to trade and foreign investment,” he said. “Our poor are still too poor and we need to do much more to improve their standard of living… To this end,the economy has to grow fast enough to create new job opportunities at a rate faster than the growth of the labour force,” the Prime Minister said.

The economy expanded by an average of 8.5 per cent between 2003-04 and 2008-09. Singh said sustained economic expansion was required to improve the standard of living. Finance minister Pranab Mukherjee had said on December 23 that the economy could grow by 7.5-8 per cent.

The Prime Minister said economic reforms had not led to any adverse impact on the country’s poor but emphasised that the systems of governance needed to improve. “Overall,greater emphasis has to be laid on reform of the systems of governance so as to reduce the scope for corruption,” he said.

On the impact of economic reforms on poverty,the Prime Minister said the opening up of the Indian economy has had no adverse impact on the poor and the percentage of population below the poverty line continues to decline.

“There is no evidence that the new economic policies have had an adverse effect on the poor. However,I would readily agree that what has been achieved is not enough. Much more needs to be done,” he said. Singh said economists have recently argued that the poverty line itself should be raised. “If this is done,the percentage of population in poverty is obviously higher. But this does not mean that the percentage below the poverty line is not declining,” he said.

According to the Planning Commission,27.5 per cent of Indians live below the poverty line based on estimates in 2004-05. Singh said since the period of rapid economic growth was largely after 2004-05,it would be only through the next estimates of 2009-10 that the real impact on poverty would be known.

Later in the day,the PM laid the foundation stone of the proposed campus of the National Institute of Science Education and Research at Argul near Bhubaneswar.