New Delhi, Jan 8 (PTI): Prime Minister Manmohan Singh today sought to dispel apprehensions of the Indian diaspora on the state of the economy, saying the country was heading towards "better times" and there is no reason to despair about its present or worry about the future.

He also said that regardless of the outcome of the next elections, they will once again demonstrate the strength of India's democracy and its institutions.

"I know that many of you have questions about the future of the Indian economy and concerns about social challenges, the shape of our polity and the issues of governance in our country. There is a perception in some quarters outside India that the country is losing its momentum of the past decade," he said.

Singh said the issue is also amplified by the "political contestations in India, which are inevitably louder in the election season" that is now on the horizon.

"I wish to assure you that there is no reason to despair about our present or worry about our future. Indeed, as I have said earlier, we are heading into better times ahead and I would urge you to remain engaged in the future of this country with confidence and optimism," the Prime Minister said at the 12th Pravasi Bharatiya Divas here.

He said despite a number of external and domestic factors, "our economic fundamentals are strong."

"Our economy has done well over the past decade. In the nine years since 2004, we averaged a healthy growth rate of 7.9 per cent per annum. There has been no doubt a slow down in the recent past, and we will probably end this year at the same level as last year with 5 per cent growth," he said.

Singh pointed out that a number of international as well as domestic factors have contributed to this situation.

"Despite these challenges, our economic fundamentals remain strong. Our savings and investment rates are still over 30 per cent of our GDP and the entrepreneurial spirit in India is very much alive and kicking," Singh said.