New Delhi: Terming the decline in investment, particularly from the private sector as a "distressing feature" of the economy, Prime Minister Manmohan Singh today (Dec 4, 2004) committed to recreate policy and political environment to boost investor confidence for increased private investment.

"I commit our Government to re-energising the economy's growth engine, to recreate the policy and political environment required to boost investor confidence and enable an increase in private investment in the economy," Singh said at the second meeting of the Council on Trade and Industry.

Underlining the initiatives taken by the Government in this direction to overcome the bad phase, he said, "No one now talks of South Asia as a nuclear flashpoint and no travel advisories are being issues apprehending war.

"There has been improvement in the security environment in Jammu and Kashmir and in the North Eastern States... I sincerely hope all political parties will conduct themselves with responsibility and a sense of national purpose so that this positive state of expectations is further enhanced," he said.

However, he noted with concern the impact of movement in world oil prices on the economy and emphasised a balanced approach suggesting, "We can de-politicise energy pricing even as we make sure that the poor are not hurt by market forces".

Terming the government's track record in inflation management as "impeccable", he said that the economy was "in capable, competent and caring hands" and that the Government was committed to the principles of equity and efficiency.

The Government has been facing flak not only from the Opposition but also from its own allies - the Left parties - over the steep price hike announced a month back. The BJP (Bharatiya Janata Party) recently took out a huge rally in the capital protesting the spiralling prices.

The Prime Minister said that it should be noted that recent inflationary pressures were almost entirely on account of increase in world oil prices.

"Holding the price line is a priority for our Government. However, we cannot insulate ourselves from the impact of movements in world oil prices," he said.