India’s government hard choices on where to spend its money, because huge investments will be required in both the public and private sectors in a turmoil-hit global economic environment, a report by the Switzerland-based World Economic Forum said on Thursday.
The report did not rule out India scaling back its integration with the global economy
The organisation that lobbies for market reforms also said a difficult environment may also slow the speed of reforms and shift the focus of management to greater efficiency.
“A great deal of political will and dialogue with different stakeholders will be required, but India’s growth is still strong relative to other economies, and its growth will continue to unfold over decades rather than years,” the report said.
The WEF’s India@Risk 2008 report, presented ahead of the India Economic Summit that starts on Sunday at New Delhi, is prepared jointly with the Confederation of Indian Industry (CII).
“India’s own markets and growth outlook will be affected by the turmoil affecting the global economy,” said Irene Casanova, Associate Director of the Forum’s Global Risk Network and co-author of the report.
“This would be particularly true if a deeper retrenchment from globalisation follows, which could manifest itself not only through decreased trade but also through countries taking tougher stances on global issues such as climate change, resource management and the role and reform of international organisations,” Casanova said.
The growth outlook for India has worsened considerably in wake of the global credit crisis. The Reserve Bank of India has revised GDP growth forecast for 2008-09 to a range of 7.5-8.0 per cent from 8 to 8.5 per cent earlier.