"Since we have already achieved about 8.2 percent in the 11th plan period, it may seem that a transition to 9 percent growth is not difficult," the prime minister said during his speech at the golden jubilee of the Indian Institute of Management-Calcutta.
"However, it is in fact a very ambitious target given the current global economic situation, which is full of uncertainties about the prospects in industrialized countries and their implications for global capital markets," he added.
A downgrade of US sovereign debt coupled with fears of another bout of recession in the world's largest economy and in Europe has sent shivers down the spines of investors across global stock markets and the likelihood of a demand slowdown is gaining strength.
"Our own economy has also slowed down compared to last year, and this year’s growth may be around 8 percent or a little more, at best," said Manmohan Singh alluding to the effects of the crisis.
"Despite this sobering environment, we should aim at 9 percent growth. This is because we are not planning for today, or even for the rest of this year. We are planning for the five year period from 2012-13 to 2016-17."
Referring to the high growth trajectory of Asian countries like Japan and Korea in the past, and China's fast-paced economic expansion in the last two decades, the prime minister said India too could grow at a rapid rate provided it could scale up infrastructure and bring out wide-spread reforms.
"India is now capable of repeating the performance of this group of Asian countries. But we must remember that it will not happen automatically, by simply proceeding on a business as usual basis. There are many difficult challenges we must overcome to achieve the transition to 9 percent growth."