PM sees ‘bright chance’ of GDP touching 7 pc

‘‘The macro-economic fundamentals have never been better. Foreign exchange reserves have risen from around $8 billion in 1991-92 to over $90 billion. External debt ratios have fallen and exports have risen significantly,’’ he said.

Vajpayee rejected the argument that too many elections in a calendar year had slackened the pace of reforms, saying the government had to keep up with democratic needs as well. ‘‘We have sought to implement our economic liberalisation with public accountability and a social conscience, so that we carry along with us the diverse shades of opinions and interest. This makes our reforms more enduring and stable.’’

The PM said India has maintained a ‘‘high growth trajectory’’ among countries that liberalised in the 1990s. Since this has been accomplished without an interim recession, it has ‘‘vindicated’’ the country’s approach, he said. ‘‘We cannot accuse democracy of impeding economic reform.’’

Instead, Vajpayee said the recent ‘‘successful coalition governments’’ had been ‘‘ideal for democratic governance’’ which had helped in ‘‘balancing divergent views and accommodating regional interests more effectively’’.

He clarified that while agriculture remained a strong contributor, the service sector was also catching up. ‘‘Agriculture contributes about 25 per cent to our GDP. Over the last decade or so, the contribution of the service sector has increased to nearly 50 per cent. Manufacturers contribute to a further quarter to the GDP. So we are not totally dependent on agriculture for our growth. Also our agriculture sector is becoming less dependent on the monsoon,’’ he said.

The ‘‘ambitious project’’ to link major river basins was part of the initiative aimed at reducing the dependability between economic growth and monsoon, Vajpayee said. He sought to downplay the statistics on Foreign Direct Investment which rated India lower among Asian economies. ‘‘Our practice was not to count reinvested earnings and external commercial borrowings as part of foreign investment. If one adjusts this, the foreign investment into India over the past few years has been roughly 1.7 per cent, which is quite comparable to that flowing into other developing countries.’’