Singh made these remarks at the closing session at the Conference of Goverors. Food inflation in the week to October 15 accelerated to 11.43 per cent propelled by soaring vegetable prices. "High food price inflation has been a particular cause for worry in the recent months," the Prime Minister said.
Singh said in the longer term the key to tackling rising food prices lay in increasing productivity and production in agriculture and allied sectors. "We have taken a number of steps in this direction in the Eleventh Plan and these will be further strengthened in the Twelfth Plan," he said.
"Meanwhile, our Government and the Reserve Bank of India will continue to take the required fiscal and monetary measures to ease inflationary pressures," he added. Singh also lamented the slowdown of the world economy, observing that the international economic environment was "not very encouraging".
Singh said there should be no doubt that the country will have the ability to deal with the most difficult of situations. He also said the country needed a second Green Revolution that is broad based and inclusive. Singh said though the expected 3.5 per cent growth in Agriculture in Eleventh Plan per annum as compared to 2.2 percent in the Tenth Plan was a very encouraging sign, Singh said the challenges that Indian agriculture faced are enormous.
"To meet the expected demand in the year 2020-21, our foodgrains production needs to grow at 2 percent per annum. This requirement has to be seen in contrast to the achieved average growth of 1 percent per annum during the 10 year period 1997-98 to 2006-07," he added. He said the resources generated from the high economic growth achieved earlier have been ploughed back in massive programmes for inclusion, especially in the fields of rural development, education and health.
"We will continue on this path in the Twelfth Plan, with special emphasis on sustainability and fiscal prudence," he said and endorsed the emphasis laid by Finance Minister Pranab Mukherjee on the need for fiscal consolidation. Singh said Government was looking at significantly enhancing its focus on development of infrastructure during the 12th Plan by mobilizing the private sector in a big way while simultaneously increasing public investment.
"We are paying special attention to speedily finding solutions to endemic problems in coal, power generation and distribution, and availability of fertilizers," he said. Against the backdrop of the recent announcement of the National Manufacturing Policy and ongoing focus on skill development and other initiatives, the Prime Minister expressed confidence that the country will be able to strengthen the manufacturing sector during the 12th Plan period.