More resources into the social sector in coming year: Dr. Singh

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Dr.Manmohon Singh, the prime minister of India said yesterday to RajjyaSabha and Lok Sabha members and addressed that :

In the last five years, our economy has grown at an average rate of 8.6 per cent. In the first four years, the average was close to nine per cent. Then came the international slowdown and our growth rate was affected. This year, it seems, that under the impact of the global economic crisis, our economy will be growing still at a fast rate, not at nine per cent but at seven per cent. As I see our challenge, it is to raise the growth rate in the next two three years, back to nine per cent per annum. It is not easy when the international climate is so unfavourable, when exports are seriously affected, when capital inflows are also affected, but I still believe that we have the capacity, on our own, to work for a growth rate of eight to nine per cent in spite of the global slowdown. Why do I say this? When I look at India's savings and investment figures, as per the latest figures that I see, the savings rate in our country is about 35 per cent. And with that sort of domestic savings rate, even with a small amount of international capital flowing in, with about 37 per cent of investment being sustained by domestic savings and reasonable capital inflows, it should be possible to sustain a growth rate of about eight to nine percent, and that is the challenge that we have to face as a Government, because our commitment to social development can become a reality; Our ability to put more resources into the social sector, whether it is food security, whether it is energy security, education security, health security all this is dependent on our ability to grow and grow faster.

I recognise that our fiscal system is under strain. The fiscal deficit has increased but I do believe that in the short run, even then we have manoeuvrability to spend more resource on our flagship programmes. I sincerely believe that Hon. Finance Minister, when he presents his Budget, will unfold the Government’s strategy in this regard.

But as I said, we shouldnot spend our money  into prosperity. In the present situation there is considerable scope to increase public expenditure, particularly on infrastructure projects and that would not lead to inflation, that would only add to our development growth potential and I reckon that is the right way to deal with international slow down that has affected many countries in the world.