Jaipur: Prime Minister Manmohan Singh today said the country was passing through difficult times and the economic growth in the current fiscal would be 7 per cent, down from 8.5 per cent a year ago.
"Our country is going through difficult times … We are up to the task of meeting these challenges we face as a nation", he said while addressing the 10th Pravasi Bharatiya Divas being attended by over 1,900 overseas Indians.
Despite an adverse international environment, Singh said, "the Indian economy is expected to grow by about 7 per cent this financial year ending March 31."
The country recorded a Gross Domestic Product (GDP) growth rate of 8.5 per cent in 2010-11 and was initially estimated to grow by 9 per cent in the current fiscal. The growth rate projection, however, was scaled down gradually by the Reserve Bank as well as the Finance Ministry.
Although Finance Minister Pranab Mukherjee had yesterday said the growth rate in 2011-12 would be about 7.5 per cent, Singh further lowered the projection to 7 per cent.
The growth rate in the first half of the year slipped to 7.3 per cent from 8.6 per cent in the year ago period.
The Prime Minister, however, exuded the confidence that growth rate in the coming years would go up to 9-10 per cent as the "economic fundamentals are strong and …consittutional processes are robust".
"…we hope to bring back the rhythm of our growth process to sustain an annual growth rate of 9-10 per cent in the medium-term. Our domestic savings rate which currently stands at 33-35 per cent of our GDP will greatly facilitate the realisation of our growth objectives", he said.
Singh also said that efforts to combat inflation have started yielding results and there has been an improvement in the situation.
The food inflation, which was about 16-17 per cent in January 2010 entered the negative zone with prices of essential items registering a decline of 3.36 per cent for the week ended December 24, 2012.
The headline inflation, which remained near the double digit mark throughout 2011, is also expected to decline in December, the figures for which would be released during the week. According to estimates, the headline inflation is likely to slip to 6-7 per cent by March end.
Referring to the global problem, Singh said the world is passing though difficult times and overseas Indians are facing brunt of the slowdown.
"Many of you are experiencing first-hand the impact of the global economic slowdown. Employment opportunities have declined, there is greater protectionism and attitudes towards migration have also hardened. There is growing social intolerance even in more open societies," he added.
The Government, he said, had formed an inter-ministerial committee under the Cabinet Secretary to make recommendations on issues relating to repatriation, relief and rehabilitation of Indians affected by recent developments in West Asia.
"The Ministry of Overseas Indian Affairs has prepared an Action Plan to implement its recommendations", he added.
Following an upheaval in Libya last year, Singh said, the government undertook Operation Safe Homecoming to evacuate more than 16,000 people from strife-torn areas through special flights and passenger and naval vessels.
Similar evacuations, he added, were carried out in Egypt and Yemen on a lower scale. "We stand ready to extend such help elsewhere should the need arise", he added.
Noting that over six million Indians live in the Gulf and West Asia, the Prime Minister said, "we need to be alert to the unfolding developments in this part of the world. We have conveyed to the countries of the region that we have a stake in the peace and stability of this region, and that we expect that they would appropriately look after the interests of Indian communities in their countries."
The government, he further said, had already decided to introduce and sponsor a new Pension and Life Insurance Fund for overseas Indian workers.
The scheme, he said, will assist overseas workers to voluntarily save for their returned resettlement and old age. "It will also provide low-cost life insurance cover against natural death," Singh added.