Inflation a concern, India heading for better times: PM

New Delhi: Claiming that his government has put the country on a high growth momentum, Prime Minister Manmohan Singh on Friday promised to roll out more reforms in the next few months.

Addressing a press conference, the third as Prime Minister, he blamed global commodity and energy prices for persistently high inflation, a factor cited for the drubbing of the Congress in the recently concluded assembly elections.

Singh also added that high prices have helped farmers and asserted the country was heading for better times.

Singh stressed his government would continue to push economic reforms, create a favourable environment for foreign direct investment (FDI) and work harder to generate more employment opportunities in the manufacturing sector.

"So long as we are in power, we will continue to push for reforms...Our government attaches highest priority to reforms...We will continue to implement our policies with vigour and commitment, aiming to revive growth, promote enterprise, generate employment, eliminate poverty," he said.

Observing that the worry about inflation is legitimate, Singh said the government had taken enough measures to protect the interests of the weaker sections of society.

"We will be honest enough to say that it could be the price rise (that) was a factor in people turning against the Congress party...international commodity prices were rising, international energy prices were rising and these were the factors. It made it difficult for us to control prices as effectively as we could have done," he said.

While wholesale inflation rose to 7.52 per cent in November, prices based on the Consumer Price Index (CPI) jumped 11.24 per cent during the month. Rising prices were cited as one of the reasons for the defeat of the Congress party in the recent assembly elections. The party lost power in Delhi and Rajasthan and performed badly in Madhya Pradesh and Chhattisgarh. 

Singh said real wages in rural areas have increased faster than before and per-capita consumption in both rural and urban areas has increased significantly. He hoped the Food Security Act, which entitles two-thirds of the population to receive subsidised foodgrains, would shield the common man from rising food prices to some extent.

Referring to job creation, Singh said the government had not been able to do well and was working 'hard' to improve the situation.

"I am concerned that we have not been as successful as we need to be in generating employment in the manufacturing sector. This is an aspect of performance which we are working hard to correct.

"We need a much stronger effort in support of small and medium enterprises, which can be a major source of good quality employment. Our manufacturing strategy gives high priority to this objective for the future," Singh said.

On economic growth, which slipped to a decade-low of 5 per cent in 2012-13, the Prime Minister attributed the slowdown to global factors but exuded confidence the momentum would revive in the coming years.

"We are set for better times. The cycle of global economic growth is turning for the better. Many of the steps we have taken to address our domestic constraints are coming into play. India's own growth momentum will revive," he added.

He said that during the term of the UPA, India for the first time in recorded history witnessed a sudden acceleration of economic growth to 9 per cent. "This exceptional performance was followed by a slowdown initiated by the global financial crisis. Over the past couple of years, all emerging economies have experienced a slowdown. India was no exception," he added. 

Singh said it was not just the acceleration of growth that "gives me satisfaction. Equally important is the fact that we made the growth process more socially inclusive than it has ever been."

India, he said, "provides a hospitable environment for foreign direct investment. We will continue to improve our practices wherever needed." Observing that the economy has gone through many ups and downs over the past decade, Singh said, "We should not focus overly on the short term."

Citing the achievements of the government, Singh said that in 2004 it tried to give 'a New Deal for Rural India' and pursued farmer-friendly policies, including raising support prices, expanding credit to farmers and increasing investment in horticulture, rural development and rural infrastructure, especially roads and electricity.

He said the Mahatma Gandhi National Rural Employment Guarantee Scheme has assured agricultural labour of a floor and has increased their bargaining power, besides improving the delivery of health and education services.

Singh said that as a result of the policies pursued by the government, the percentage of the population below the poverty line has fallen much faster in the 2004-2011 period than it did in the previous 10-year period and that the number of people below the poverty line has come down by 13.8 crore.

Regarding the impact of the external situation on the domestic economy, the Prime Minister said, "The one lesson we shall all learn from our experience over the past decade is that the world around us is becoming more challenging.

"This is both a function of our greater integration with the world and of the international community's expectations from a rising India. This is India's manifest destiny. We should recognise it as such and learn to deal with it."