Klaus Schwab, left, founder and executive chairman of World Economic Forum (WEF), and Indian Prime Minister Manmohan Singh at the WEF’s 25th India Economic Summit-2009 in New Delhi on Sunday. (AFP)

NEW DELHI: India’s premier Manmohan Singh promised Sunday to step up financial reforms to drive economic growth as he rolled out the welcome mat for foreign investors.

India is “better placed than any time in the recent past to push the reform process forward,” Singh told more than 600 delegates from around the globe at the World Economic Forum conference.

Since its decisive reelection win last May, the Congress-led government has been in a position to push ahead more boldly with reforms that were blocked by communists in the previous Parliament.

But critics say the government has been dragging its feet and that Singh’s statements were seen as a bid to reassure international investors of the government’s commitment to liberalizing the economy.

Singh, known as India’s “economic liberator” for starting the process of opening up the economy in the 1990s, said government policy would be guided by a desire to modernize financial markets.

The government would also cut red tape and make India an “even more attractive for foreign direct investment,” he said.

“You are all welcome in our efforts” to accelerate India’s growth, he said.

“We are particularly keen to rationalize and simplify procedures so as to create an investor-friendly environment,” said Singh, referring to investor complaints that India is a bureaucratic nightmare.

The government is aiming for 6.5 percent growth in this fiscal year and “over seven percent” expansion next year, he said.

Medium-term, the government’s aim is to achieve eight to nine percent growth, he said. “Clearly, the worst is behind” the global economy, Singh said, but he added the path to sustained recovery “will be long.” This meant the country of nearly 1.2 billion people would have to rely heavily on domestic demand to power growth, he said.

“We seek to achieve this through a large increase in investment in infrastructure,” he said.

Economists identify overhauling India’s dilapidated infrastructure — transport, power and other sectors — as critical to propelling growth. “We need to ensure the financial system can provide the finance needed for our development, and especially for infrastructure development,” Singh said.

“This opens up a broad agenda for reform,” he said.

He said India had attracted $121 billion in foreign direct investment since 2001 but that this was not enough to meet its development needs. He promised India would develop a long-term debt market and a corporate bond market to generate funds.