New Delhi: India needs to improve macro-economic parameters like inflation, fiscal balance and current account deficit to achieve 9 percent growth rate, President Pranab Mukherjee said Thursday.
"...Unless many of our current macro-economic indicators like price level, fiscal balance and current account balance improves, it will be difficult to revive economic growth to the 9 percent plus levels which is absolutely imperative if we want to achieve the objective of removing poverty," he said while addressing an AIMA function here.
India's economic growth rate slipped from 9.3 percent in 2010-11 to 6.2 percent in 2011-12. It is estimated to fall to 5 percent in 2012-13.
The immediate challenge before the country, Mukherjee said, is to "reverse the deceleration in growth".
"It is possible for us to re-enter the 7-8 percent growth bracket in the next two to three years. But for that, we must revitalise investments in the country," he added.
The decline in growth, he added, is due to factors like tight monetary policy aimed at containing inflation, lack of adequate procedural flexibility for projects and reduction in export demand due to global slowdown.
In order to improve the macro-economic parameters, the government has drawn a road-map to bring down the fiscal deficit to 3 percent of the GDP by 2016-17, from 5.2 percent in 2012-13. Similarly, steps are being taken to reduce the current account deficit, which touched a historic high of 6.7 percent of the GDP in the quarter ended December 2012.
Although the WPI inflation moderated to 6.84 percent in February, retail inflation continued to remain a matter of concern at 10.91 percent in the same month.
Referring to the current business environment, Mukherjee said, "We must be realistic in our assessment of India’s economic prospects. The downbeat atmosphere seen these days is unwarranted. Foreign investors are positive about our economy."
The net inflow from Foreign Institutional Investors at Rs 1.6 lakh crore in 2012 reflected a substantial rise from the Rs 39,000 crore in 2011, he added.
The need of hour, he said, was to take advantage of the likely improvement in the global economy.
"We should leverage this growth outlook by enhancing the competitiveness of the domestic industry, especially our export enterprises", he added.
Quoting a survey, Mukherjee said that India is the third most preferred destination for Foreign Direct Investment (FDI) after China and the US.
Between April 2012 and January 2013, over Rs 1 lakh crore have come to our economy as FDI, he said, adding "our infrastructure sector has great potential to make productive use of these investments. The sectors with high linkage to infrastructure such as automobile, steel and cement, enjoy high growth in India as compared to many of her competitors."
Besides, Mukherjee said India has to do much more to be at the forefront of innovation.
"Only one in 50 patent applications in the world is filed in India. Our patent regime has the difficult task to sustain encouragement to innovation on the one hand and maintain market competition and ensure accessibility and affordability, on the other."