New Delhi, Mar 19: Montek Singh Ahluwalia, Deputy Chairman of India"s Planning Commission said, on Thursday, Mar 18, that India has recovered from the global economic crisis and was now headed towards economic growth.
Speaking at the Asia Society"s 20th Asian Corporate Conference, co-organized by The Wall Street Journal and The Confederation of Indian Industry (CII), Ahluwalia said that India withstood the global crisis and grew 7pc in 2009.
He said that India is determined to achieve 9pc growth in 2010.
In his speech Ahluwalia briefed on the government"s plans to meet this goal, including other challenges that India will face in 2010.
Stating that Asian recovery has drawn India's attention toward regional integration, He said that the free trade agreement between India and ASEAN, the Southeast Asian regional bloc, was an example of this shift.
He added that India will remain to the world but its primary focus will be upon on Asia as the region is expected to achieve rapid growth.
As far as India is concerned, the unofficial projections for 2010 is of 8.5 per cent, which is lower than the official target of 9 per cent but more than the IMF prediction of 8 per cent.
The Deputy Chairman expressed confidence of strong overall growth irrespective of lower export growth. His substantiated his confidence in Indian economy by referring to the previous growth which was achieved largely by domestic demand, proving that lower export growth can be balanced by greater investment, especially investment into infrastructure.
The 'inclusive growth' method adopted by the Indian economy supported by numerous schemes such as the National Rural Employment Guarantee Act (NREGA) to help in raising land productivity is one of the strenght of the Indian economy.
The economy also received a major boost from the emergence of the dynamic private sector that can compete with foreign imports and eventaully leave a footprint abroad.
He said that infrastructure and public investment like rural electrification and better roads would be brought in areas to encourage setting up of private sector industries.
He downplayed deficit, stating that a gradual reductions of 1pc or so will ensure fiscal responsibility policy for India. he said though India's high debt-to-GDP ratio was an outlier, most of the countries have high debt-to-GDP ratios, adding that it is safe as long as India continues to grow at 7 to 8 percent.
India's 2010 strategy to rely on on increasing foreign investment will not only stimulate the economy, but will also help India cover its balance of payments deficit.
He added that being the 2nd fastest growing economy in the world, India will not have any problem in overcoming a weaker fiscal position.
Ahluwahalia concluded by saying that India was going through economic growth and creating demand in contrast to the world economy.
"We are growing our economy and creating demand, while elsewhere there is a deficiency of growth. We are good global citizens," Ahluwahalia said.