PM urges revival of Indian economy's 'animal spirit'

Indian Prime Minister Manmohan Singh has urged finance officials to revive the economy's "animal spirit" and reverse a climate of pessimism at a time of sharply decelerating growth. A day after taking over the finance ministry portfolio, Singh called in top ministry officials late Wednesday for a pep talk that focused on finding measures to boost flagging investor sentiment. "We need to work to get the economy going again and restart the India growth story," Singh told the officials, urging them to "reverse the climate of pessimism ... (and) revive the animal spirit in the country's economy." India's once-booming economy is suffering from slowing industrial growth, troublesome fiscal and current account deficits, stubbornly high inflation and a stalled reform agenda. The economy grew just 5.3 percent in January to March, its slowest quarterly expansion in nine years. "On the external front, I am concerned about the way the exchange rate is going. Investor sentiment is down and capital flows are drying up," he said. The Indian rupee has lost more than a quarter of its value in the past 12 months and is currently Asia's worst-performing currency. Singh took over the finance portfolio on Tuesday following the ministerial resignation of Pranab Mukherjee, who stepped down to contend India's presidential election in July. According to an official in the prime minister's office, Singh intends to retain control of the ministry for at least several months and will only appoint a permanent successor "when he thinks the time is right." A former governor of the International Monetary Fund, Singh previously served as finance minister between 1991 and 1996, when he famously launched the reforms that opened the Indian economy. Singh's squeaky-clean public image has been tarnished in recent years by high-profile corruption scandals in his government, and a series of major reform U-turns have led to charges of policy drift and weakness.