Prime Minister Manmohan Singh Tuesday projected a bullish picture of economic growth saying that the gross domestic product would grow by 7.5% during the current fiscal and a growth rate of 10% should be targeted in the next two-three years.
"It is certainly within the realm of possibility that an appropriate combination of policies can raise the GDP growth beyond 8% easily. In fact, we should be targeting a 10% growth rate in two-three years' time," Dr Singh said at the India Economic Summit 2005, organised by the World Economic Forum and Confederation of Indian Industry.
He said economic think-tanks had projected an average growth of 7.5% over the next four years.
A growth rate of 10% was possible if the rate of savings could be increased, the services sector continued to maintain its momentum, agriculture production increased significantly and if investment in infrastructure provided a fresh impetus to the industry, the prime minister said.
He said the government will try to evolve a consensus on making the labour markets more flexible along with putting in place a social safety net.
"I believe there are no external constraints to India's growth and whatever constraints are there, are internal," Dr Singh said.
He said these constraints were imposed by our polity, our social structures, our regional imbalances, our inability to handle inequity and our inability to take hard but essential decisions.
Dr Singh stated that India's foreign investment policy was among the most liberal in the world except in the financial, retailing and coal mining sectors.
"Sometimes our ability to create bureaucratic hurdles in the way of enterprise amazes me. I think, as far as the FDI is concerned, it is not the policy but badly designed procedures and poor infrastructure which act as a constraints," he added.
He said over the next few years there could be increased regional trade in Asia and a free trade area covering China, Japan, Korea and Australia and New Zealand was possible.
On ways to make up the "infrastructure deficit", the prime minister said the institutional framework was in place and over Rs 1,70,000 crore was expected to be invested over the next seven years for the National Highway Development Programme, where a BOT-driven approach had been adopted.
He said some new private ports were under development and more were in the pipeline. Expressing his satisfaction at the performance of the railways, Dr Singh said the Rs 25,000 crore freight corridor would be a boon, while private competition for Concor would be ushered in.
Dr Singh said he was himself holding consultations for improvements in the power sector, which continued "to be plagued with complex problem".
He said the government was working on ways to remove the bottlenecks in agriculture. "The key to their (the majority of the population) -- and the prosperity of the entire nation -- depends critically on transforming and rejuvenating agriculture," he said.
Dr Singh listed out a single food law, transferable warehouse receipts, amendments to the Essential Commodities Act and the development of an advanced forward market in commodities as priority areas to unshackle the sector.
He said a revival in agriculture was on the horizon and the private sector should not miss out on this opportunity.
