India's economy will grow by more than 7 percent next year, Singh said yesterday. The figure is still below the government's medium-term rate target of 8 to 9 percent that is seen as helping to reduce widespread poverty.

"In the coming months and years, I hope to see a decisive change in the pace of our progress to become a leading economy in the world," Singh said.

He said India needs to develop long- term debt markets, deepen corporate bond markets, strengthen the insurance and pensions sectors and improve the futures markets.

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The prime minister won a resounding election victory in May and recent state polls have bolstered the ruling coalition, raising hopes the government will push forward with reforms, especially in the financial sector.

Reforms in Singh's first government in 2004 to 2009 stalled due to pressure from his communist allies, now out of the ruling coalition after election defeats.

The prime minister said with a normal monsoon next fiscal year growth is expected to be more than 7 percent and the government will take steps to wind down the stimulus in 2010. "There are clear signs of an upturn in the economy," Singh told the World Economic Forum's India Economic Summit in New Delhi.

Finance Minister Pranab Mukherjee said last week that the government will maintain its fiscal stimulus for the time being until uncertainty eases.

The Reserve Bank of India has started what it calls the first phase of the exit from its easy monetary policy, worried about inflationary pressures.

Singh added the economy is expected to expand by 6.5 percent in the year to March 2010.

REUTERS