"We have to make all out efforts to change the conditions that affect the rapid growth of the country's economy," he said addressing a dialogue meeting of top Congress leaders in this picnic town on the outskirts of the national capital.
The prime minister highlighted reducing the fiscal deficit, tackling the subsidy bill on food, petroleum products and fertilisers, infrastructure development and spurring farm growth as key challenges before the country. He pointed out that the fiscal deficit, which was reined in at 2.5 per cent of the GDP in 2007-08, rose to 5.76 per cent in 2011-12.
"High fiscal deficit can have very negative impact on the country. This can lower the confidence in our economy. Domestic and international investments would trickle down. Economic growth would slow down leading to unemployment and increase in poverty," Singh said in a blunt and frank assessment of the economy. Singh said the government had to take certain tough decisions regarding petroleum products but had taken care to ensure that the poor and weaker sections were least affected.
"This is the reason why we have not hiked the prices of kerosene," Singh said. He listed Right to Education, mid-day meal scheme, skill development mission, rural jobs scheme among significant achievements of the government.
"We have to bear in mind that the resources needed for these measures have been made available because of rapid economic growth," he said. Singh expressed confidence that the government's "good economic policies will give strength to good politics".