To attain a sustained GDP growth of 8-9 per cent, the problem of poverty needs to be addressed, President Pranab Mukherjee said here on Saturday.
“There are some areas of deep concerns in the Indian economy. I would like to draw your attention to one particular area of infrastructure, both physical and social,” he said at the 86th Annual General Meeting of the Indian Chamber of Commerce (ICC).
According to the President, the Planning Commission had estimated an investment of $1 trillion in the infrastructure sector between 2012 and 2017.
Nearly 50 per cent of this investment is to be made by the private sector through Public Private Partnerships (PPPs). The other 50 per cent would come from “other sources” including government.
Reforms
In this regard, the Centre took steps to create “investment friendly countries” and economic reforms were undertaken. “Reform is a continuing process. It cannot be stopped….because every new sets of problems require a new set of solutions,” he added.
Between 2003-04 and 2012-13, gross domestic savings stood at over 30 per cent on an average. On the other hand, the investment rate cannot be less than 36 per cent.
According to Mukherjee, a 36 per cent investment rate can ensure a GDP of 8-9 per cent, considering minor slippages. The gap would come from “investment surplus countries” and some of it will be “diverted” to infrastructure.
“I am glad that the Government is fully aware of this and has taken appropriate steps in this regard,” he said.
Social infrastructure
While allocation in respect of healthcare sector has been increased, there is a need to focus on primary and tertiary healthcare. Improving the service, especially in some parts, is urgently required. Similarly, in education allocations have been increased. But even then a large number of people are unskilled.
By 2030, 54 per cent of Indian population will be in the working age group and this huge workforce needs to be provided with work by injecting skill, the President said.
Pointing out that “globalisation is here to stay”, Mukherjee said that we need to ensure mobilisation of work-force across the borders.
“It is true that there has been some improvement in employment growth, but at the same time much more needs to be done,” he said.
Economy growth
In his speech earlier, Mukherjee has mentioned that the “India growth story” is still unfolding despite the challenges domestically and globally.
The economy witnessed an average growth of 7.9 per cent over a 10 year period between the years 2003-04 and 2013-14, despite the financial crisis of 2008. Compared to the 80s and 90s, the growth remained around 6 per cent and 6.5 per cent.
“The problems with which we are confronted, most of the countries are confronted with those problems.…. I do not know, in Indian history, anytime if we had this level of GDP growth….despite the fact that there was a global crisis in 2008,” he said.
Calling for greater co-ordination between the States and the Centre, Mukherjee referred to the Goods and Service Tax (GST) scenario.
According to the President, politicians, Chambers and all stakeholders need to come together for a consensus and work together.
“If we want GST…. Unless we can get the states on board, however, lofty the idea may sound….we all have to work together,” he said.