Indian PM says poverty battle hit by world downturn

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GUWAHATI, (India), April 19, (AFP): India's prime minister, campaigning during the ongoing general election, today blamed developed countries for the global recession that has damaged his efforts to tackle dire poverty.
Manmohan Singh, touring India's poor northeast, said the international downturn had dampened the nation's growth rate, but that he expected India's economic expansion to soon return to its recent peaks.
"This crisis is not our making, this is a crisis which has arisen because of the mishandling of the financial system by the major developed countries," he told reporters in Assam state's main city of Guwahati.
"From a financial crisis it has become a credit crisis and therefore it has affected a large number of developed countries."
This had affected Indian exports, capital and credit flows into the country, he said, adding that despite these problems, India was expected to clock 6.5 to seven percent growth in the year ending March 2009.
Singh's Congress Party, which is seeking re-election in national polls being held from April 16 to May 13, has delivered strong economic growth since being elected in 2004.
Forecasting a partial global recovery by September, Singh said that "if that happens, we can hope go back to growth rate of eight or nine percent which has been the growth rate of India in the past five years."
But to lift an estimated 300 million people who live on less than a dollar a day out of poverty, India needed to clock double- digit growth, he said.
"I have always believed we need a growth rate of nine to 10 percent to tackle the problem of poverty and also that that growth should be evenly distributed."
India has seen a big drop in domestic demand for manufactured goods, vehicles and property, and exports have slumped as global markets have dried up.
The main opposition BJP-which embraced opening up India's economy when in power between 1999 and 2004 -- has proposed a ban on foreign direct investment in the retail sector to promote domestic trade.