New Delhi: Former prime minister and architect of economic reforms Manmohan Singh on Saturday said sustaining 7-7.5 per cent GDP growth will require significant increase in investments, particularly in infrastructure, and revitalising external trade.
Economic policies have to be designed in a manner that the redistributive process does not fill up public financing and nor is the growth process hampered, he said at the annual session of PHD Chambers of Commerce.
"To achieve this objective, inclusive development needs to be combined with consolidation of public financing, financial stability, employment generation economic growth and protection of environment," he said.
The Modi government, which succeeded Singh-led United Progressive Alliance regime in 2014, has talked about catapulting the nation to being the world's fastest growing major economy.
"Although India is now growing at an annual rate of 7-7.5 per cent per annum the sustainability of growth process would require a significant increase in rate of investment particularly in new infrastructure sectors as well as revitalisation of our international trading sector, particularly exports," he said.
India, he said, is moving from a phase of 1991 economic reforms to an era of sustainable development.
"The priority now must not only be to accelerate, but the multi-dimensional aspect of growth, equity, inclusion, employment generation and environmental sustainability," he said.
Singh said it is important to recognise several challenges experienced in higher education, eradicating poverty and malnutrition.
"Economic growth and macro economic stability are necessary for reducing poverty," he said, adding that the countries which have successfully reduced poverty are the ones which have combined rapid growth with equity in sustaining growth process. Public policies influence both distribution as well as generation of income, Singh said, adding that there was a need to go beyond establishment of social safety nets to protect the vulnerably groups of society from the risks they face. The focus, he said, must be on proving decent employment through policy intervention.
"India needs to create 12 million new jobs per annum to absorb new entrants to the labour force. The available data in unemployment point to significant gaps in our performance," he said.
The importance of growth cannot be ignored, he said, adding that the strategy which focuses on reducing inequality through redistribution of income, but ignores growth, is unlikely to lead to a sustained process of poverty reduction.
"India has to adopt a multi-pronged strategy that includes rapid growth, reducing poverty and creating employment opportunity, improving access to essential services in health and education, especially for weaker section, empowerment to education skill development and creating new job opportunity," he said.
The country can achieve the targets it has set for itself and effective employment strategy can be devised only through improved training and skill development. Stating that thousands of students going abroad for higher education every year points to qualitative and quantitative gaps, Singh said there is a need for reassessing, reevaluating and reforming the system of higher education.
"Successive governments have tried to increase the spending on education to 6 per cent of GDP, but actual spending has hovered around 4 per cent for the last several years. Both health and education need to move up in terms of national priority," he added.
Government, urban and rural bodies, private sector have to come together to achieve zero growth in malnutrition, he said. Regretting that there are large inequalities in health services, Singh said successive government have been responding to overcome the problem of hunger and malnutrition.