NEW DELHI: Targeting a GDP (gross domestic product) growth of 10 per cent in two-three years and terming it as "eminently feasible," Prime Minister Manmohan Singh on Tuesday pledged to explore the possibilities of permitting foreign direct investment (FDI) in the retail sector, sort out problems in the power sector and strive to usher in flexibility in the labour market.

Dwelling on the two ticklish issues while addressing delegates at the concluding session of the India Economic Summit here, Dr. Singh said: "We will try for a consensus on making labour markets more flexible ... As for FDI in retail, we are engaged in an intellectually stimulating exercise to understand the possibilities that exist in opening up this sector and how best we can harness it for our needs."

Setting the country's GDP growth target still higher, Dr. Singh said that India was likely to average a growth of 7.5 per cent in the next four years but "we should be targeting 10 per cent growth in two-three years. In my view, this is eminently feasible, if we manage a quantum leap in growth rate of agriculture, if investment in infrastructure provides a fresh impetus to industry and if services continue with their impressive performance," he said.

`Take-off' point

The country's infrastructure, Dr. Singh said, had reached a "take-off" point. "All the elements of an essential institutional framework are now falling in place. If the private sector seizes the initiative, the sky is the limit," he said.

The only hurdle in this regard was the power sector, which was plagued with complex problems. Assuring that this problem too, would be sorted out, Dr. Singh said, "We are determined that we will set many things right in the coming year. I am personally holding wide consultations to remedy the situation here [power sector]."

On the trade front, Dr. Singh visualised the emergence of a free trade area in Asia within the next few years and outlined the road map for free trade agreements (FTAs) with China, Japan, South Korea and possibly, even Australia and New Zealand. "This pan-Asian Free Trade Area could be the third pole of the world economy after European Union and NAFTA and will open up new growth avenues for the economy," he said.

Efforts were being made to move towards a single integrated farm market, Dr. Singh said. For this, an integrated food law, transferable warehouse receipts, an advance forward market in commodities along with amendments to the Essential Commodities Act were essential.

"We should work towards liberating agriculture from controls that shackle its potential. We have nudged many States into amending the APMC Acts ... We may see India emerging as the granary of the world. The private sector must not miss out on this opportunity and must ride the boom that I see on the horizon," he said.

As for FDI, the Prime Minister said the policy regime was already quite liberal. But still, a group of Ministers was looking into ways of further revamping the existing FDI regime with the aim to cut red tape. In fact, "barring the financial, retailing and coal mining sectors, India was extremely liberal in welcoming FDI," he said.

Noting that there were no external constraints to growth, Dr. Singh said that the hurdles being faced were all internal, "imposed by polity, social structure, regional imbalances and inequity, besides [the] inability to take hard but essential decisions."

"We need growth, we need jobs, we need income and we need security," he said. "History will judge us harshly" if bold decisions were not taken, Dr. Singh added.

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