Tokyo, May 28: Terming the slump in economic growth a temporary slow down, Prime Minister Manmohan Singh today said India's fundamentals are intact and the country will revert to 8 per cent growth path.
Addressing leading business honchos at a luncheon hosted by industry chamber Nippon Keidanren, Singh expressed confidence that economic growth in 2013-14 will improve to around 6 per cent from the decade's low of 5 per cent witnessed in the previous financial year.
"The 5 per cent growth witnessed last year should be seen as a temporary slow down. The Indian economy grew at an average of 8 per cent per year over the past decade, including the last year of 5 per cent growth. The economic fundamentals which made that possible are still intact. We are confident therefore that we can return to the growth path of 8 per cent," said Singh, who is on three days visit to Japan.
The visiting Prime Minister also assured business leaders that India would be taking more steps to attract foreign investments.
"We have taken tangible steps to enhance incentives for investments. We have liberalised foreign investments in areas like multi-brand retail, power exchanges and civil aviation and further rationalisation and simplification is being planned. We have introduced further reforms in the financial markets," he said.
Singh also informed that the Reserve Bank of India (RBI) has indicated that it will start the process of issuing new bank licences. "As a result of these efforts, we expect that growth in 2013-14 will be much better than in the previous year, hopefully around 6 per cent or so. We will do even better in 2014-15," he said, adding, India's strategy for growth involves heavy investment in infrastructure.
Admitting that "lack of quality infrastructure" is the Admitting that "lack of quality infrastructure" is the single biggest obstacle to achieving higher levels of competitiveness, Singh informed business leaders that India has targeted an investment of around USD one trillion in infrastructure over the Twelfth Plan period (2012-17).
Half of the investment is expected from the private sector and public-private-partnership. "India's growth will provide expanding opportunities for foreign investment... I hope Japanese business will pick up a large share of the investment opportunities that India offers," the Prime Minister said.
India accounts for only 4 per cent of total Japanese outward investment flow into Asia.
The two ongoing flagship projects of India - Japan partnership are the Western Dedicated Rail Freight Corridor between Mumbai and Delhi and the associated Delhi Mumbai Industrial Corridor.
Singh also said a study is being conducted by research institutions in India and Japan on Liquified Natural Gas (LNG) pricing for Asian importers and will be ready by the end of the year.
India and Japan are both major importers of LNG.