India PM says reforms steps 'only the beginning'

India PM says reforms steps 'only the beginning'

NEW DELHI - India's premier Manmohan Singh said Saturday his government's new reforms to spur the economy were "only the beginning", while lashing out at "excessive pessimism" that he said is hurting growth.

Singh's scandal-scarred government has unleashed a blitz of reforms to further open up sectors such as retail, insurance and aviation to foreign investment as it seeks to kickstart growth before facing voters in polls due in early 2014.

"The steps we have taken are only the beginning of a process to revive our economy and take it back to its trend growth rate of eight to nine percent," Singh told an audience of corporate leaders in New Delhi.

"Our government has acted to reverse the cycle of negative expectations and stimulate investment," he said.

But "excessive pessimism at home" about the country's economic prospects and a "less supportive" global environment have made the Congress-led government's task of reviving the flagging economy much tougher, he added.

India's growth slipped to a near-decade low of 6.5 percent in the last fiscal year and is expected to fall even lower this year to around 5.5 percent.

While much of the world would envy such a growth rate, the pace is not enough for India, which says it needs close to double-digit expansion to substantially reduce crushing poverty.

Singh said the government had taken tough decisions to rekindle investor enthusiasm and seek to rein in India's ballooning fiscal deficit that has brought warnings of a downgrade from global ratings agencies.

"Some of the decisions we have taken were politically difficult," Singh said.

Opposition parties that have been fighting the reforms are "either ignorant or constrained by outdated ideologies", he said.

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