A massive updating of the infrastructure – including ports, power and hinterland connections – has to take place for India to fulfill its dream of becoming a manufacturing “superpower” as Shekhar Gupta, editor-in-chief of The Indian Express told delegates.
But Kevan Watts, head of Bank of America Merrill Lynch in India pointed out to the audience that to achieve these touted growth rates, “India will need reform… to ensure domestic capital flows into investments”.
It seems that so far, despite a huge (40%) household savings rate, most of the money resides in traditionally ‘safe houses’ like gold, a long way away from the kinds of investment that could be used as capital for infrastructure work – such as road or rail links.
The capital market reforms proposed by India’s Prime Minister Manmohan Singh, during his keynote address, spoke of the need to “develop long-term debt markets and to deepen corporate bond markets” which will help money flow in; he added India is committed to “fast and inclusive growth”.
