Dr Singh, who was addressing the students of JK Laxmipat University, also vouched for the fact that institutions like the Supreme Court (SC), the Central Bureau of Investigation (CBI), the Central Vigilance Commission (CVC), the Election Commission of India (ECI) and other such bodies are expected to work in an independent manner.
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"Presently our country seems to have slowed down somewhat. The rate of GDP is declining. The investment rate is stagnant. Farmers are in distress. The banking system is facing a crisis, and unemployment is going up. We need a well-conceived national strategy to make India a 5 trillion economy," said Singh.
The former Prime Minister said that the need of the hour is to continue with the economic reforms that will build on liberalisation policies that have been implemented and factoring in a dynamic business environment.
"India since the economic liberalisation in 1991 has shown how a democratic set-up has led to a general improvement in the living standards of our people. Since then, millions of people have risen above the poverty line. There have been several policy measures undertaken by the successive governments that have led to more inclusive growth in India, particularly under MGNREGA and well-designed programmes of universal health care and education," he said.
"With more purchasing power in their hands, demand in the economy goes up encouraging private investment, more government revenues and taxes to fund infrastructure needs, good roads, railway and reduction in social conflict. Thus, it is clear that democracy does increase economic growth," said Singh.
"To strengthen, our democracy we need principle, knowledgeable and visionary leaders. It needs political parties committed to safeguarding values enshrined in our Constitution. For our continued unity, the government has to deliver justice, liberty, equality, and environment that respect the contrary opinion," he said.
Former Prime Minister Singh also said that we have to respect the supremacy of Parliament and its procedures, the rules of the government.
"Serving the federal structures like the Supreme Court, the Election Commission of India, the Controller and Auditor General of India, the CBI, Vigilance Commission, the Information Commission and various other commissions constituted by the government from time to time are expected to function independently within the framework of the Constitution," he said.
For long, major opposition parties including the Congress have been accusing the Central government of misusing institutions like the Election Commission and the CBI.
Talking about investments, Singh said private investment depends upon the credibility of government policies, "which depend on the depth of the middle class and the rise of the middle class depends on the private investment."
"To avoid virtual and vicious cycle requires a bit of luck, leadership, and team of people including industrialists who are prepared for the common good. In particular, the government should forbid tax terrorism, respect independent voices, and provide checks and balances at every level of the government," he said.
The former Prime Minister, himself a noted economist, said that some have argued that democracy is inimical to economic development and cited authoritarian regimes like China which have made phenomenal economic progress.
"It has been argued that although one-party has its drawback when it is led by an enlightened group of people it can also have great advantages. By persuading citizens to focus primarily on economic growth, these countries created an atmosphere of fear in which sacrificing personal freedom could be justified," he said.
"This allowed these regimes to impose politically difficult but critically important policies needed to move the economy forward. But over time as incomes grow, it changes the aspirations of people which ultimately strive for a democratic structure. In the long run, the functioning democracy has definite advantages over an authoritarian regime," Singh added.
He further said that today there is a stressful time for democracies across the world and for them Indian democracy is a beacon of hope and inspiration.
"It is a stressful time for democracies all over the world ... Democratic India is not only the world's largest democracy but also one of the most vibrant democracies in the world. It is perhaps India's greatest achievement ... Our shining democracy is a beacon of hope and inspiration to a world that is yearning and striving to become democratic," said Singh.
He underlined the strength of "our democracy lies in the Constitution of India, which has framed and defined tenets of democracy as all-encompassing and reflective of fundamental values of equality, liberty, fraternity, secularism, and justice."
The former Prime Minister stressed that population explosion, poverty, social inequality, and corruption, etc are challenges for the democracy in India.