New Delhi: Stressing the need to create conditions to increase investment rate, President Pranab Mukherjee on Saturday said bringing economic growth back to 8 to 9 percent was a "collective challenge" before government and Industry and further reforms were required to meet it.
"On Saturday India is among the fastest growing countries in the world.... India's share in world GDP has doubled in the last two decades.... It became the third largest economy in the world on purchasing power parity basis this year.     

"We have, therefore, a collective challenge to reverse this deceleration in growth and raise it to 8 to 9 percent that we had recorded for most of the years in the previous decade," Mukherjee said.
The President said the recent global financial crisis did not affect India, as it has some of the stronger economies, is a testimony to the maturity of the country's regulation.
"Nevertheless to realise the full potential of this sector and achieve an accelerated growth and inclusion, further reforms are required in banking, pension and insurance," he said.
He said the rapid economic growth after 2003-04 was accompanied by a rise in the investment rate. But it has declined after reaching its peak in 2007-08 "and for this, we have to create the conditions required for it."
He was addressing Annual Session of the Chief Ministers' conclave organised by PHD Chamber.

Referring to the various sectors, Mukherjee said the manufacturing sector is an important tool for the creation of jobs in the country.
He lamented that the growth in the sector, which was 9.7 percent in 2009-10 and 7.6 percent in 2010-11, declined to 2.5 percent in 2011-12.
"The share of manufacturing in India's GDP of around 16 percent, which has been the level since the eighties, is much lower than the comparable economies in Asia such as Thailand, South Korea, China and Malaysia, where its share is between 25 to 34 percent," he said.
He said India has the advantage of a demographic dividend. The average age of population in India is below 30 years and over 60 percent is in the working age group. "This provides us with a unique advantage for driving future growth.

But, it could also pose a serious challenge of creating 220 million jobs by 2025," the President said.
Underlining the need to further augment the culture of research, he said only about 6,000 patent applications were filed by Indians in 2010, which is a mere 0.30 percent of the total applications filed in the world.
"India spends only 0.9 percent of GDP on research and development...the share of the private sector in research and development in India is only one-fourth and there is an urgent need to increase it," Mukherjee observed.


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