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NEW DELHI: India's premier Manmohan Singh promised Sunday to step up financial reforms to drive economic growth as he rolled out the welcome mat for foreign investors.
India is "better placed than any time in the recent past to push the reform process forward," Singh told more than 600 delegates from around the globe at the World Economic Forum conference.
Since its decisive re-election win last May, the Congress-led government has been in a position to push ahead more boldly with reforms that were blocked by communists in the previous parliament.
But critics say the government has been dragging its feet and that Singh's statements were seen as a bid to reassure international investors of the government's commitment to liberalising the economy.
Singh, known as India's "economic liberator" for starting the process of opening up the economy in the 1990s, said government policy would be guided by a desire to modernise financial markets.
The government would also cut red tape and make India an "even more attractive for foreign direct investment," he said.
"You are all welcome in our efforts" to accelerate India's growth, he said.
"We are particularly keen to rationalise and simplify procedures so as to create an investor-friendly environment," said Singh, referring to investor complaints that India is a bureaucratic nightmare.
The government is aiming for 6.5 per cent growth in this fiscal year and "over seven per cent" expansion next year, he said.
Medium-term, the government's aim is to achieve eight to nine per cent growth, he said.
"Clearly, the worst is behind" the global economy, Singh said, but he added the path to sustained recovery "will be long."
This meant the country of nearly 1.2 billion people would have to rely heavily on domestic demand to power growth, he said.
"We seek to achieve this through a large increase in investment in infrastructure," he said.
Economists identify overhauling India's dilapidated infrastructure -- transport, power and other sectors -- as critical to propelling growth.
"We need to ensure the financial system can provide the finance needed for our development, and especially for infrastructure development," Singh said.
"This opens up a broad agenda for reform," he said.
He said India had attracted US$121 billion in foreign direct investment since 2001 but that this was not enough to meet its development needs.
He promised India would develop a long-term debt market and a corporate bond market to generate funds as well as pursue insurance and pension sector reforms.
There would also be "faster progress" in privatisation, he said, referring to a government decision last week to list at least 10 per cent of the equity of all profitable state-run companies on the stock market.
Singh added it was vital to ensure growth was "inclusive" and improved the lives of the estimated 40 per cent of the population living in extreme poverty.
Singh's pitch for international investment comes amid growing violence in Pakistan and Afghanistan.
Singh said India, for its own security, needed a "neighbourhood in which peace, progress and stability can be assured."
"It is the understatement of the year that these conditions do not prevail."
- AFP/yb
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