Jakarta: India will persist with open trade regime, Prime Minister Manmohan Singh has said expressing confidence that the impact of the slew of measures initiated to boost the economy will be "visible" soon.
Asserting that fundamentals of Indian economy remain strong, he said India can get back to 8 percent growth rate in the short to medium term.
"... We are purposefully addressing the fiscal and current account deficits. At the same time, we will persist with our open trade regime. I am confident that the impact of these measures will be visible soon," Singh told Indonesian newspaper Kompass.
Noting that India's savings and investment rates are still over 30 percent of the GDP, Singh said that given capital output ratios, "we can restore the growth momentum to 8 percent per year in the short to medium term".
To bolster growth, which declined to 5 percent in the last fiscal, the government has taken a number of reform steps.
The prime minister said various reform measures to boost domestic investments, attract more foreign investments, strengthen the financial sector and improve and simplify the tax regime have been taken.
"We have launched a broad range of entitlement programmes for the vulnerable sections of our population that require special attention of the government," Singh said.
Acknowledging that are some supply side bottlenecks, he said those are being addressed through policy and administrative reforms.
"If you leave aside last year's economic performance, in the previous nine years, the Indian economy has grown at an average annual rate of about 8 percent per annum.
"This is the highest rate of growth achieved by India in any previous decade," he added.
The prime minister said growth declined in the last fiscal partly due to recession in the global economy, including in the eurozone and slow growth in US and Japan.
"India imports nearly 80 percent of its oil requirement and rising oil prices and slump in exports have hurt our trade balance," he said.
When asked about main issues that would influence voters during the general polls in 2014, Singh, who is on a visit to Indonesia, said elections are a way of life.
"In today's India, the electorate of close to 800 million is educated and politically well-informed. Many are young and full of energy, enterprise and ambition.
"They seek a better life for themselves and their children through access to opportunities, jobs, education, skill development, food and health care. All these issues are bound to figure in the run-up to the elections," the prime minister said.
According to Singh, emerging economies have been affected by the prolonged global economic crisis as well as uneven and uncertain recovery.
"Slowdown in our exports and in inward flow of investments has affected growth and balance of payments," he said.
He noted that unconventional monetary policy followed by major developed countries and expectations around its reversal had induced huge volatility in the financial and currency markets.
"However, each of us also needs to take appropriate national measures to accelerate economic growth, attract foreign investments and boost exports, including by leveraging the competitiveness generated by currency depreciation," he emphasised.
Regarding China, Singh said that economic co-operation constitutes a very important part of the bilateral relationship.
"... The growth potential of our two economies can provide the engine for greater cooperation and can also contribute to prosperity in Asia and beyond.
"We have had differences, but we have steadily built a mature and mutually beneficial relationship. We have maintained peace and tranquility on our borders. We also collaborate on a range of regional and global issues," the prime minister said.
On expectations from his Indonesia visit, Singh said the country is a key constituent of India's Look East Policy.
Singh said that he was looking forward to consolidate and deepen the strategic content of the bilateral relationship, strengthen trade and investment relations, and broaden people-to-people linkages.
"There is enormous potential for bilateral cooperation across a broad range of areas, including trade and investment...," he added.
A number of agreements are expected to be signed between the two countries during Singh's visit.
"I invite Indonesian companies to look at the immense investment opportunities that India offers in the infrastructure, logistics, hospitality, and services sectors.
"It would be of mutual benefit if Indonesia invites Indian investments in education, health care, pharmaceuticals and port development," Singh said.
On trade between India and Indonesia, which stands at around USD 20 billion, the prime Minister said the trend in bilateral trade is positive.
"We are confident of achieving the bilateral trade target of USD 25 billion by 2015. We believe the potential is much higher," he said.
However, Singh emphasised that trading activities should be diversified and impediments should be resolved to encourage higher flow of investments in both directions.
"A bilateral Comprehensive Economic Cooperation Agreement (CECA) will open up the potential on both sides and provide strong impetus to growth," he noted.
Besides, Singh said that early signing of ASEAN-India Services and Investment Agreements, negotiations on Regional Comprehensive Economic Partnership (RCEP) and emergence of an ASEAN Economic Community by end-2015 would also have a positive effect.
First Published: Thursday, October 10, 2013, 18:36