India's economy is expected to expand 6.5 percent this year despite inadequate monsoon rains that caused agricultural production to dip, Singh told participants in a three-day India Economic Summit organized by the World Economic Forum.

“There are clearly signs of an upturn in the economy. With a normal monsoon next year, we hope to achieve a growth rate of over 7 percent,” Singh said. Singh was India's finance minister in the early 1990s and was the prime architect of economic reforms that propelled the country on its current growth trajectory.

India has fared better than most countries in the ongoing global economic downturn, Singh said. He said the government will now concentrate on accelerating the pace of economic reform, opening up key areas such as the financial sector. However, the government will ensure that the benefits of the policies reach the poorer sections of society, he said.

“Our strategy today is not just to deliver rapid growth, but to deliver rapid and inclusive growth,” Singh said. The emphasis will be on creating jobs and raising living standards in rural areas, he said.

India's premier rolled out the welcome mat for foreign investors Sunday, promising to step up economic reforms to draw global funds and put the country on a high growth path. Prime Minster Manmohan Singh, speaking to a blue-chip international economic summit, said policy would be guided by the desire to create “an investor friendly environment.”

India had attracted foreign direct investment of more than US$120 billion since 2001-02 but more was needed to develop its vast economy, he told a World Economic Forum meeting in New Delhi.

“You are all welcome in our efforts,” he told 600 delegates from around the world, adding that the government wanted to push through reforms to make the country more attractive for investment. “We need to strengthen our financial system in various ways to make sure it can provide what is needed for our development,” he said, promising to open up insurance and other financial sectors more aggressively to generate funds.

Since winning a decisive re-election victory in May, the Congress-led government has been able to pursue reforms blocked in the last parliament by communist opposition.

“I am happy India has been able to face the global economic downturn better than most other countries in the world,” he said. “Our medium term objective is to achieve eight to nine percent growth.”

Singh said “clearly the worst is behind” the global economy but he added the path to sustained recovery “will be long and somewhat uncertain.” This meant India would have to rely heavily on domestic demand to power its growth, he said.

Overhauling the country's dilapidated infrastructure — roads, airports, ports and other services — would be key to keeping the economy on the recovery trail, he said. He added it was vital to ensure growth was “inclusive” and improved the lives of the estimated 40 percent of the nearly 1.2 billion Indians who still live in extreme poverty.