Prime Minister Manmohan Singh on Friday said rising prices have emerged as a major concern for the government and stepping up productivity is the only way to ensure that economic growth is not inflationary.
Government has taken several measures to moderate rising prices and at the same time tried to ensure that inflation control measures did not hurt the growth momentum in the last four years, Singh said after laying the foundation stone for the Rs 1,750-crore expansion and modernisation of the Salem Steel Plant.
"In the Eleventh Five Year Plan period, we expect the economy to grow at around nine per cent. To ensure that growth process is not inflationary, we must step up productivity and increase output," Singh said.
In order to ensure non-inflationary growth, the country must step production in all sectors, he said, adding that India still has a long way to go in creating infrastructure for modernising the country.
Congress President and UPA Chairperson Sonia Gandhi, along with several central ministers, was also present on the occasion.
Lauding the role of public sector Steel Authority of India Limited (SAIL) in the country's economic growth, Gandhi said the PSUs would continue to occupy a crucial position in areas like steel, power, gas and telecommunication.
The UPA government is committed to empower the PSUs, she added.
The Prime Minister said that the rising prominence of the domestic steel industry on the world's steel landscape showed the country's emergence as a leading economic power and gave India the status of fifth largest producer of the alloy in the world.
"If the present trends continue, we will become the second largest producer in the world by 2015," Singh said.
He said the per capita consumption of steel in the country is still very low in comparison to industrialised and industrialising countries and yet "we are today in a sellers' market and will continue to be so".
He said SAIL played a vital role in the country's march towards industrialisation and self-reliance and hoped the key public sector unit will rise to the new challenges of today's intensely competitive global steel market.
Speaking on the importance of public sector, Gandhi said it (SAIL) has been acting as a "catalyst" in the industrialisation of the country and attributed the overall public sector growth to the "visionary investments" made in the 1950s and 1960s by former Prime Minister, late Pandit Jawaharlal Nehru.
Recalling that late Indira Gandhi laid the foundation for the Salem Steel Plant 38 years ago, Gandhi said there was a move to privatise the PSU but after UPA government came to power, it "abandoned" the policy of "indiscriminate privatisation" by the earlier BJP regime.
She said the social obligations by the PSUs could be best met by making profit in a sustainable manner.
Union Minister for Fertilizers, Chemicals and Steel Ram Vilas Paswan said that though the demand for steel was increasing at the rate of 13 per cent, the production was growing only at six per cent, creating a mismatch in demand-supply.