"The economy has recorded 7-7.5 percent growth in the last three years and we are inching towards 8-10 percent," he told a press conference here.

"All our macro-economic indicators are robust and point to another year of over 7 percent growth," he said, referring to his government's commitment to sustain 7-8 percent growth.

The economy had logged over 8.1 percent in the first half of 2005-2006 after clocking 7.5 percent last fiscal.

"India today is the faster growing nation ... At the World Economic Forum, India was the star attraction," he said.

While presenting a rosy picture of the economy, Singh said there was considerable improvement in the last 20 months of the government but admitted that "there was some problems that the government will tackle with determination."

However, he said government has to strengthen the mechanism to improve the fiscal situation. "I have reasons to believe that if we accelerate the pace of economic growth, there will be significant improvement in fiscal situation."

On state finances, he said: "If you look at the cash position, some states are plush with cash." Their financial position was better than ever before, he said.

With higher growth in the economy, Singh outlined the need to increase the savings rate in the next few years from the present 29 percent.

A hike in savings rate by 4-5 percent on account of employment of younger generation will add up one percent to the overall growth in GDP, Singh said.

Increased efficiency because of competition will add another 0.5-1 percent to the economic growth, he said, justifying the optimism for high 8-10 percent growth.

The Prime Minister outlined the need for power reforms for which he will convene a meeting with state chief ministers in two weeks.

"We have to increase the generation capacity by 150,000 MW in the next seven years. We have to improve distribution and transmission also. That will require heavy investment," Singh said favouring "proper pricing" of power by all public utilities.

He also stressed on increasing credit to farmers and strengthening of rural credit institutions through a financial package of Rs 130 billion.

Highlighting the improvement in India's international relations with other nations, he said: "India is sought after everywhere and we are reaching out to everyone who wants to work with us."

He said India will sign a free trade agreement with ASEAN by the end of this year. India already has a Comprehensive Economic Cooperation Agreement with Singapore and FTA with Thailand. Economic cooperation with Brazil, South Africa and Russia is being strengthened.

The relations with US and China are better than ever before, while India has a strategic tie-up with EU, he observed. For strengthening infrastructure, the Prime Minister said: "We expect an investment of over Rs 1700 billion in the National Highway programme in the next seven years."