New Delhi - The Asian Development Bank on Wednesday urged India's new government to cut stifling red-tape to draw foreign investment and get the country back on a high-growth track.
ADB President Takehiko Nakao, speaking after holding talks with India's new right-wing premier Narendra Modi, noted the country's economy posted near double-digit growth just a few years ago.
“To get back to a high-growth path of eight-to-nine percent, it's crucial to implement investment-friendly reforms being initiated by the government,” and ease India's bureaucratic red-tape, Nakao told reporters in New Delhi.
During a speech marking India's Independence Day earlier this month, Modi urged foreign companies to set up shop in the country, telling them “Come, make in India.
Sell anywhere, but manufacture here. We have the skill and the talent.”
But to draw badly needed foreign direct investment (FDI) to overhaul India's creaking infrastructure such as its roads and ports, the government must implement regulatory and other economic reforms, Nakao said.
“This is a very big market for foreign investors, but they face difficulties getting approvals,” he said.
Nakao said there were “high expectations” from Modi's right-wing government which took power in May with promises to make India an easier place to do business.
“It is important to show outcomes sooner rather than later,” he said.
The ADB head said economic growth can speed up “very quickly”, judging by the performances of other Asian nations, if the right policy actions are taken.
But he would not specify how long it might take India to return to a significantly higher growth trajectory.
India still significantly lags rival China in per-capita income.
The South Asian nation of 1.25 billion people is home to one-third of the world's poor according to the World Bank.
Nakao forecast growth of 5.5 percent for India for the current financial year to March and 6.3 percent the following year.
India's economy is seen accelerating this year, helped by higher industrial output and a more buoyant consumer mood.
India's economy grew by 4.7 percent last year, marking the second straight year of sub-five percent growth.
The ADB said it was providing loans worth $7 billion (R74 billion) to $9 billion over the next three years to develop India's infrastructure and boost manufacturing to employ the country's growing army of young workers.
India is the largest borrower from the ADB. - Sapa-AFP