NEW DELHI, Feb 25: President Pranab Mukherjee today said the Indian economy has a high degree of integration with theworld economy, with an international trade to GDP ratio of 44 per cent.
“India, too, felt the repercussions of the global slowdown. Our economy, which grew in excess of 8 per cent in six out of the last ten years, showed a decline in 2011-12 and 2012-13,”Mr Mukherjee said while addressing the alumni of the owner President Management (OPM) programme of the Harvard Business School (HBS), who are in India for their reunion function. He said the corporate sector has a key stake in any economy.
It has a lubricating effect in the smooth functioning of economic activity round the globe, he said. “Since the financial crisis in 2008, the world economy has been under considerable strain. The depressed global economic growth has had a contagion effect in the globalising world. No economy could remain immune from its consequences,” he said.
He said the global economy is today portraying signs of revival but its consolidation will depend on how quickly its growth centres, especially the US and Europe, recovers.
The President said: “As for India, the continuing concerns about its growth prospects and macroeconomic stability are rather exaggerated. True, the spurt in investment that led the high economic growth after 2003-04 has declined since 2007-08.”
“But through multiple measures, we have created the necessary conditions to kick-start investment. We have remained firm in our commitment to a business-friendly environment – impediment-free, predictable, facilitatory and transparent. Recognising the need to improve governance of investment projects, we have created a mechanism aimed at speeding the implementation of large infrastructure projects,” Mr Mukherjee said.
He said a defining article of our economic reforms programme is our abiding confidence in foreign direct investment (FDI) as a vehicle for economic progress.
“India is rated as one of the most-preferred destinations for overseas investors. FDI inflows reached a high of 35 billion dollars in 2011-12. Though it has thereafter declined somewhat, I am confident that with the revival of global business sentiments, we will be able to draw significant investments from outside,” he said.
He said to ease FDI inflows, we have enhanced FDI limits in several sectors like retail and telecommunication, and removed restrictions in the banking sector. “Sectors with high linkage to infrastructure – automobiles, steel and cement – enjoy robust growth in India.
The infrastructure sector offers a great opportunity to enable productive use of foreign investments. I am hopeful of investment picking up soon to spur economic growth” Mr Mukherjee added. (UNI)
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