Indicating that the worst may be over for the Indian economy, Prime Minister Manmohan Singh today said the economic situation is turning around with inflation coming under control and the GDP growth likely to exceed six percent in the current fiscal.
Speaking on the fourth anniversary celebration of the UPA-II government, Dr Singh said eight percent growth rate was possible if the Congress-led coalition is voted to power again next year.
"The economic situation is turning around. Inflation is coming under control. The fiscal deficit is being brought under control. The current account deficit is high, but we will bring it down gradually.
"We are confident that growth in 2013-14 will be better than 2012-13 and could exceed 6 percent," he said.
Attributing the decline in economic growth - estimated to be five per cent in 2012-13 - to global phenomenon, the PM said the "slowdown is temporary".
A six percent growth in the current year will set the stage for returning to eight percent growth in the current Five Year Plan period, ending March 31, 2017.
"This will be difficult, but it is not impossible. We have done it before, and if we receive a mandate next year, we will certainly achieve it again," Dr Singh said.
Stating that agricultural growth was critical for rural prosperity, the Prime Minister said the government was targeting four per cent growth in the sector and is attempting to increase foodgrain production as well as diversifying agriculture.
"This is the foundation which allows us to introduce Food Security legislation in Parliament," he said, adding that the government had also introduced the Land Acquisition and Rehabilitation Act to replace the old and highly unfair colonial legislation. The new Act will be much fairer to those whose land is acquired, Dr Singh said.
The PM said the UPA's track record is better than that of the BJP-led NDA in terms of growth. While the country's average growth rate was eight percent in the last nine years, the average growth in the NDA government's six year term was only 5.7 percent.
Dr Singh said some of the slowdown in growth was due to external factors, but domestic problems too pulled down GDP.
"It is also true that domestic problems had also arisen. These are being addressed. Many large investment projects are held up because of various regulatory clearances. A Cabinet Committee on Investment was set up to deal with this problem, and this is already yielding results," he said.
Referring to allegations in allocation of spectrum and coal blocks, Dr Singh said the government has introduced a more transparent mechanism for allocating scarce resources.
"We have introduced more transparent systems for the future, i.e., auctions rather than relying on administrative allocations," he said.
He further said, "Allegations of impropriety are being investigated and cases of wrongdoing will be punished. But we can claim credit that the root cause of the problem, which was the perceived non-transparency in the manner of allocation, has been addressed and these problems will not arise in the future".