New Delhi, May 2 (KNN) International Monitory Fund (IMF) Deputy Managing Director Naoyuki Shinohara has asked India to focus on basic infrastructure as investment in roads, ports, airports and electricity has lagged behind and remains the main bottleneck. 

“Concerns in India center on the slowdown relative to the recent growth outcomes,” he said. There are three possible explanations for this slowdown – global economy, cyclical policies and structural bottlenecks, Shinohara said, adding that India’s growth has slowed more than can be explained by the impact of global developments or internal policies.

“This leaves us with domestic capacity constraints. The need for infrastructure investment is obvious. As investment in roads, factories, ports and energy has fallen, the speed limit of the Indian economy has come down too. Getting back to 8 per cent growth will require addressing the investment problem, and that means getting companies investing again,” Shinohara said at a FICCI function here yesterday. 

Several infrastructure sectors are faced with the problem of high debt, project hold-ups, regulatory hurdles and banks’ apathy. 

The IMF Deputy Managing Director said for the past half-decade, the emerging markets and developing economies have led the world’s recovery – accounting for three quarters of global growth. 

However, in India, he said project approvals have become much more difficult, increasingly complex and overlapping regulations.

Intensified scrutiny of all the projects are some of the constraints that are starting to have a negative impact on the economy, he said, adding this also has external ramifications. Capacity constraints mean that exports cannot keep up with demand. 

Shinohara also underlined some of the global policy challenges such as rebalancing global demand, building a system that safely supports the real economy while limiting dangerous risk taking and creation of job opportunities. (KNN)