If India becomes investment- friendly
Posted : November 26, 2004 at 5:56 am [IST]
The World Bank’s report “India Investment Climate Assessment 2004″ deals with an in depth study on investing in India. Its observations are interesting.
India must raise its investment rate from 23 per cent to 30 per cent in order to sustain a growth rate of eight per cent over the long term.
” The government should reduce entry and exit barriers for manufacturing sector and remove infrastructure bottlenecks.
” The industrial policy also stands in the way of doing business. The bureaucracy makes everything time consuming so much so that the average time to start a business in India is 89 days compared to a mere two days in Australia.
” The power outage averages 17 per cent in the country and 61 per cent of the firms need to have their own generator sets, which increases the cost of power.
” At least two interrelated sets of regulatory and institutional reforms are needed in order to improve India’s investment climate.. The regulations should be adequately modified to remove the impediments to the smooth functioning of labour, land and product markets, and for streamlining of regulation of business startups and bankruptcy procedures. The second reform set should address physical infrastructure bottlenecks and weaknesses in the financial and other business services
” The corporate sector’s investment to GDP must increase steeply, particularly in the industrial sector
” The gap between India’s rich and poor regions is a lot wider than the competitiveness gap between India and China. The per capita income in the state of Maharashtra is three times more than that in Uttar Pradesh. The eight per cent annual growth rates in the GDP of Gujarat and Maharashtra are in contrast with the four per cent growth rate in Orissa and Bihar.
” However, there has been substantial improvement in India between 2000 and 2003.
- Indra
Category: Government Policy/Administration |
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