NEW DELHI, (Reuters) – Indian Prime Minister-elect Manmohan Singh vowed yesterday to revive growth and spread the benefits of economic expansion that swept his coalition back to power with a decisive mandate in a general election.
Singh, 76, formally elected by lawmakers of his Congress party as their leader, said his coalition would pursue reforms in agriculture,industry and the wider economy to spread the benefits to the country’s 1.1. billion population.
“There is some slowing down of investment and employment generation. We have to revive growth and make it even more inclusive,” he said in an acceptance speech as MPs thumped desks.
Two powerful regional parties from northern India said they would support the Congress party-led coalition, further strengthening the stability of the new government.
Heads of the Bahujan Samaj Party and the Samajwadi party, two major groups in India’s most populous state, Uttar Pradesh, said they had written to Indian President Pratibha Patil pledging their support to the coalition.
The two parties have 44 lawmakers in parliament between them.
Singh’s coalition won 262 seats in the 545-member parliament, just 10 seats short of a majority, boosting hopes of a stable government.
Congress campaigned during the month-long election on a record of spending on the rural poor, including a public jobs programme in the countryside and a costly loan waiver programme for indebted farmers.
Singh said it was important to sustain a high growth rate to make it more inclusive, but that would require new investment and better management of public finances. Growth in Asia’s third-largest economy is expected to slow to a seven-year low of about 6 percent this fiscal year from about 7 percent in 2008/09, and from rates of 9 percent or more in the previous years. Millions of jobs have already been lost.
Analysts say an expansionary fiscal policy could further stretch public finances and widen the deficit, which is running at about 10 percent of the gross domestic product.
