Nine-month reform window opens for UPA

Prime Minister Manmohan Singh today said his government would control inflation – caused largely by a steep increase in oil prices – without hurting the rate of economic growth and employment. Inflation, at 11.91 per cent for the week-ended July 5, is already at its 13-year high and there are fears the country’s growth will lose momentum if high prices persist. India’s gross domestic product grew 9 per cent in 2007-08, but the Reserve Bank of India has estimated the growth rate in the current fiscal to be lower at 8-8.5 per cent.

Replying in a Parliamentary debate leading to a vote of confidence, which the United Progressive Alliance (UPA) government won, the Prime Minister also said the government was increasing investment in agriculture to boost farm output. “We have decisively reversed the declining trend of investment and resource flow in agriculture. We have achieved a record foodgrain production of 231 million tones. But we need to redouble our efforts to improve agricultural productivity,” he said.

Making a strong case for a civilian nuclear cooperation agreement with the US, Singh said India needs to grow at the rate of at least 10 per cent a year to get rid of chronic poverty, ignorance and disease which still afflict millions of our people. “A basic requirement for achieving this order of growth is the availability of energy, particularly electricity. The generation of electricity has to grow at an annual rate of 8-10 per cent,” he said.