Indian premier set sights on 10% growth

Indian Prime Minister Manmohan Singh on Sunday said he hoped the nation’s economy would overcome a recent dip in confidence to post annual growth rates closer to 9 or 10 percent.

Addressing a business conference in the northwestern city of Jaipur, the premier admitted that growth in the current financial year would be down sharply from earlier government forecasts of nine percent.

“Despite an adverse international environment, the India economy is (still) expected to grow by about 7.0 percent this financial year ending 31st March,” he said.

“However, we hope to bring back the rhythm of our growth processes to sustain an annual growth rate of 9 to 10 percent in the medium term.”

India’s central bank has raised interest rates 13 times since March 2010 in a bid to stem high inflation but the hawkish policy has angered businesses which complain it has hit growth and investment.

“Our efforts to battle inflation are producing results and there has been an improvement in the situation,” the prime minister said in his address to some 1,500 people attending the conference from two dozen countries.

Indian food prices fell in late December, the first decline for nearly six years which raised hopes that the Reserve Bank of India may loosen its tight monetary policy stance.

The Indian economy grew 8.5 percent in the 2011 fiscal year, and 7.4 percent in the previous year.