India's economy, Asia's fourth largest, can grow at an annual pace of 10 percent - tackling poverty - if nearly $320 billion is spent fixing creaky infrastructure, the prime minister said on Saturday.
Manmohan Singh told an infrastructure conference higher manufacturing and farm sector output was the key to boosting growth beyond the current 8 percent a year. More reliable electricity supplies and better roads and ports were needed to allow for a surge in growth, he said.
"A growth rate in the vicinity of 10 percent is not impossible to achieve," said Singh, who liberalised the economy when he was finance minister in the 1990s. "Our growth potential will be realised only if we can ensure that our infrastructure does not become a severe handicap."
The heavily indebted government would not be able to manage such huge investments alone, Singh added, and he urged the private sector to invest in the country's development. The government wants sustained 8-10 percent growth to significantly cut poverty in a country with 1.1 billion people. Nearly a quarter of the population does not have access to clean drinking water, proper sanitation and regular meals.
Foreign firms often cite rickety infrastructure such as shaky power supplies and congested ports, roads and airports as the biggest challenge to doing business in India.
But private players have been slow to invest in power projects and roading in the absence of proper user charges, an issue that has tripped up investments in the past. "Investment in infrastructure...will need to be of the order of about 14.5 trillion rupees or $320 billion between 2007-12," Singh said.