There is anxiety among investors not only on the pace and nature of economic reforms but also political stability in India, a top World Bank official has said.
This, he said, could be the possible reason for slowdown in investment, both domestic and foreign, in the country.
“India is not starting from a position of collapse in investment in any way,” Martin Rama, chief economist (South Asia), World Bank, told a group of Indian reporters on Wednesday.
“But I think there certainly is in the minds of investors an expectation and anxiety on the progress on reforms and on the kind of stance that the new government would have — whether it would be a coalition government or not a coalition,” he said.
A report on South Asia released by the World Bank on Wednesday said that India’s slowdown is broad-based across sectors.
“Vulnerabilities, mainly due to a wide CAD and high inflation, reducing macro buffers and increasing reliance on investment persists. Slower growth and tighter fiscal space may affect India’s progress towards universal health coverage,” the report said.