India's government is promising more inclusive growth as it begins its fourth year in office. As Anjana Pasricha reports from New Delhi, the pledge follows a series of recent electoral setbacks that have raised fears that the popularity of the Congress Party, which heads the governing coalition, is waning.

Manmohan Singh (File)

At a dinner held Tuesday to mark his government's three years in office, he pledged to improve the lives of all Indians by boosting investment in agriculture, and tackling such issues as rising food prices.

"We have taken credible steps to control inflation, and we will continue to be vigilant on this front, so that the poor and vulnerable sections of society do not suffer unduly," he said. "In the next 10 days, we will be unveiling a major initiative which will not only enhance the total public investment in agriculture, but will also enable states to resolve problems of agriculture with comprehensive localized plans."

The prime minister's assurances of more inclusive growth followed criticism that the fruits of the country's rapidly rising economy have failed to trickle down to the poor. This has triggered disillusionment with a party that came to power promising the poor a share in the country's growing prosperity.

Local elections held recently in three states indicate the Congress Party-led coalition is losing support. Uttar Pradesh is India's most populous and politically significant state, and results there usually indicate which direction the country will take in national elections. In voting there this month, Congress emerged a distant fourth. Earlier, the party suffered electoral losses in Punjab and Uttarakhand.

Political observers say the problem is the most severe in the countryside, where nearly two-thirds of India's billion-plus people depend on farming.

Mahesh Rangarajan, an independent political analyst in New Delhi, says the government has failed to do enough to turn around the deteriorating farm sector, which he says is in crisis.

"Agriculture now for the first time accounts for less than 19 percent of the gross domestic product.," he said. "The growth has really been in services ... Those who are benefiting are very small in number, and those who are not benefiting are very large in number."

Rangarajan says what is needed is the large-scale production of labor-intensive jobs in both manufacturing and agriculture. This, he says, is where the government has fallen short.