The 5 per cent growth that the Indian economy recorded during the last financial year should be seen as a temporary slowdown after an average growth rate of 8 per cent over a decade that ended in 2012-13, prime minister Manmohan Singh said today.
Addressing business leaders at a luncheon hosted by industry chamber Nippon Keidanren, Singh expressed confidence that India's economic growth in 2013-14 will improve to around 6 per cent from the decade's low of 5 per cent in the previous financial year.
He said the 12th Five Year Plan outlines the many things that needed to be done for India to realise its full growth potential and to make that growth inclusive and sustainable.
''Our people have tasted the benefits of rapid growth and they will not settle for less. I want to assure you that our government is committed to take hard and difficult decisions in the long term interest of our economy,'' he said.
Singh, who is on three days visit to Japan, also assured business leaders that India would be taking more steps to attract foreign investments.
"We have taken tangible steps to enhance incentives for investments. We have liberalised foreign investments in areas like multi-brand retail, power exchanges and civil aviation and further rationalisation and simplification is being planned. We have introduced further reforms in the financial markets," he said.
Singh also informed that the Reserve Bank of India (RBI) has indicated that it will start the process of issuing new bank licences.
"As a result of these efforts, we expect that growth in 2013-14 will be much better than in the previous year, hopefully around 6 per cent or so. We will do even better in 2014-15," he said.
He said Japan's contribution to India's economic development has been enormous. For many years, Japan has been our largest bilateral donor and Japanese assistance has financed some of our most iconic infrastructure projects such as the Delhi Metro and now the Dedicated Freight Corridor, he noted.
He said India's strategy for growth involves heavy investment in infrastructure. ''We have targeted an investment of around $1 trillion in infrastructure over the 12th Plan period, with half of it coming from the private sector and public-private-partnership.
''India's growth will provide expanding opportunities for foreign investment. We welcome foreign investment in the development of our economy and especially so in the critical infrastructure sector. I hope Japanese business will pick up a large share of the investment opportunities that India offers.
''The scope for expanding economic co-operation between our countries is enormous. As Asian democracies, we have shared values. We have a very comfortable relationship between the two governments. There is also great public goodwill in both countries,'' he said.