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Page last updated at 12:45 GMT, Thursday, 4 June 2009 13:45 UK

India 'to boost economic growth'

President Pratibha Patil with PM Manmohan Singh at the swearing-in on 22 May 2009
The new government says it aims to revive the economy

India's new Congress-led government will focus on reviving economic growth and helping millions of poor people, President Pratibha Patil has said.

She set out the government's agenda in a speech to both houses of parliament.

The first priority was to counter the effects of global economic slowdown, she said, adding that welfare schemes would also continue.

The president said the government would seek to mend fences with Pakistan - provided it confronted "terrorists".

Congress and its allies won a sweeping general election victory in May. The strong showing has raised expectations the government will push ahead with economic reforms.

Investment

In her address - prepared in consultation with the cabinet - President Patil said the government would aim to revive economic growth.

President Pratibha Patil
President Patil hinted at better ties with Pakistan

There would be higher investment in sectors such as infrastructure, while maintaining fiscal prudence, she said.

"The current financial year is expected to see a slowing down of growth on account of the global recession.

"Our immediate priority must be to focus on management of the economy that will counter the effect of the global slowdown."

She said the government would take steps to encourage foreign investment in-flows, list shares in state-run firms and provide banks with more capital.

The government also plans to continue several of its pro-poor and welfare policies.

Welfare schemes for farmers, better health facilities for rural areas and an expansion of a rural employment guarantee scheme will be high on the agenda, the president said.

Families below the poverty line will be allotted 25kg of rice or wheat every month at 3 rupees a kilo.

Diplomacy

Pratibha Patil said Delhi would work with its neighbours to ensure the region's full potential.

"My government will seek to reshape our relationship with Pakistan depending on the sincerity of Pakistan's actions to confront groups who launch terrorist attacks against India from its territory," she told parliament.

There would be a "zero-tolerance" approach to terrorism "from whatever source it originates".

Relations between India and Pakistan deteriorated after India blamed Pakistan-based militants for last November's Mumbai attacks which killed at least 170 people, nine of them gunmen.

Delhi reacted with dismay earlier this week when a Pakistani court ordered the release from house arrest of Hafiz Mohammad Saeed, who India links to the Mumbai attacks.

The charity he heads is accused of being a front for Lashkar-e-Taiba, the banned militant group he founded which India says was behind the attacks.

Jamaat-ud-Dawa denies any links with militants.

The US - which lists Jamaat-ud-Dawa as a terrorist organisation - was also disappointed.

"We continue to impress upon the government of Pakistan the importance of bringing the perpetrators of the Mumbai attacks to justice," State Department spokesman Robert Wood said on Wednesday.

"Pakistan has a special responsibility to do so, transparently, fully and urgently."



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