The government has dispelled the economic gloom and doom that has been clouding India for the past few years by improving the climate for foreign investment, Prime Minister Manmohan Singh has said.

Speaking at an awards ceremony in Mumbai late Saturday, Mr. Singh admitted that exports from India have declined and the fiscal deficit has widened since 2006, which has hit investor sentiment very hard.

Speaking on the topic, he added, "We have dispelled gloom and doom, improved the climate for foreign investment (and) are working hard to restore investor confidence and the growth environment."

India's economic growth declined to 6.5 per cent in 2011 and is expected to decline further to roughly 6.0 per cent in the current fiscal year. The declined growth rate has prompted many economists to predict that India's growth story would go astray.

But, Mr. Singh claimed that the raft of reforms announced by his government in September would revitalize the economy and attract huge foreign investments. He added that the government has more policy changes in the pipeline.

To revive the economy and arrest widening fiscal deficit, the government in September slashed subsidies on fuels, including cooking gas, and opened sectors like multi-retail and aviation to foreign investors.