New Delhi: 

Prime Minister Manmohan Singh said the Indian economy will return to a long-term growth pace of 9% as inflation slows and the government extends a record of market-opening policies.

“We will stay the course,” Singh said in an interview in his office in Parliament House in New Delhi on Wednesday. “We will make India an eminently bankable and creditworthy economy.”

Gross domestic product will increase 7.5% in the fiscal year that ends 31 March, while inflation will cool to between 6% and 7%, he said. The slide in the rupee won’t diminish investor confidence, he added.

The Prime Minister said he expects to succeed in his push to open India’s retail market to foreign companies after assembly elections conclude by the end of March. The BSE benchmark index, the Sensex, had its biggest three-day drop since July 2009 after his administration suspended a cabinet move further opening up India’s retail industry to foreign direct investment (FDI).

Shoppers Stop Ltd, India’s second-largest retailer by market value, gained 1% to Rs

 310.6, ending five straight days of losses after Singh’s pledge on opening the industry to foreign investment. Wal-Mart Stores Inc. and 

Tesco Plc are among the overseas companies that have pushed to enter Asia’s third-largest economy.

The rupee pared losses, and closed at 53.715 in Mumbai on Wednesday. India’s currency has tumbled 16.77% so far this year, the worst performance among 10 major Asian currencies tracked by Bloomberg, hurt by India’s parliamentary gridlock, elevated inflation, a widening budget gap and the weakest economic growth in two years.

                                                                                                               

Shares shed 0.8%; sticky inflation disappoints

The 30-share BSE index closed down 121.37 points at 15,881.14, with 24 of its components closing in the red

Mumbai: Shares ended 0.8% lower in choppy trade on Wednesday as November inflation held stubbornly above 9%, disappointing investors, but growing hopes that the central bank could keep rates steady this week and likely adopt a more dovish tone amid slowing growth dabbed some cheer.

The wholesale price index in November rose 9.11% from a year earlier, remaining above 9% for 12 consecutive months despite 13 rate increases by the Reserve Bank of India (RBI). Inflation, however, eased from October’s 9.73% rise, driven by a sharp drop in food inflation.

”While this data disappointed, sentiment largely is still optimistic because weekly inflation data has been showing a downward trend and with overall growth slowing down, the market is expecting a pause on Friday,” said Neeraj Dewan, director with Quantum Securities, a New Delhi-based brokerage.

The 30-share BSE index closed down 121.37 points at 15,881.14, with 24 of its components closing in the red. It rose nearly 1% on Tuesday after losing nearly 6% over the three previous sessions.

The outlook for the benchmark, which is one of the world’s worst performers this year having lost 22%, remains bearish.