Describing India as an engine of growth in South Asia, the US Assistant Secretary of State for South and Central Asia, Nisha Desai Biswal yesterday said that the country faces real vulnerabilities. "Over 400 million people in India lack reliable access to energy. Road traffic is supposed to quintuple in six years but highway construction is slated to grow at a paltry four percent a year", she said.
"India's leaders have targeted to spend USD 1 trillion over five years in infrastructure investment to close the infrastructure gap that prevents real growth in the manufacturing sector, yet it continues to have policies that inhibit foreign investment," Biswal said in her address to Harvard University, Kennedy School of Government in Boston.
India still ranks poorly amongst all countries as a hospitable place to invest and start a new business, ranked 134 out of 189 countries, she said, adding that India must meet the skills gap to grow its economy.
"In fact, India needs eight times the number of trained architects and civil engineers than it has now to meet its growth projections," she said. So, without sugar-coating its challenges- a tough neighborhood, tightening economic growth and the mounting impacts of pollution on public health - India, the world?s largest democracy, must decide its own path to the future. Will it make the reforms necessary to attract investment? Will it capitalize on the opportunities that lie in front of it?" she added.
"Those are the questions that India?s voters are asking as they cast their ballots and those are the questions that we want to see answered. We know that India has the potential to exceed all of our expectations, and it has done so in the past," Biswal said.
"But to do so we believe India's investment and tax policies must be designed to lure - not deter - capital flows; timely regulatory approvals and contract enforcement must be embraced; and protection of intellectual property must be enforced," she said. Observing that time and again the rules-based trading system has helped grow and integrate developing powers into major players on the global scene, Biswal said the more integrated India is into global markets and into the economic architecture of Asia, the more India's economy will grow and benefit the entire global economic system.