News: 'India needs to spend 12.5% of GDP on infrastructure'

(PTI 16/09/2006) Singapore - The World Bank today commended India for its high economic growth rate in the last couple of years, but said massive investments would be needed in infrastructure for it to come up to the level of China.

The bank also appreciated the Right to Information Act, which holds the potential for dramatically greater contestability of government decision-making and implementation.

A report, to be discussed tomorrow at the World Bank and IMF meeting here, said India and Pakistan had been averaging a GDP growth of nearly 7 per cent.

The agency said the most vivid demonstration of South Asia's lower investment rate was the massive infrastructure deficit that plagues countries in the region. It said: "India will have to invest 12.5 per cent of GDP per year until 2015, approximately four times its current investment."

Co-author of the report "Economic Growth is Creating 'Political Space' for Deeper Reforms in South Asia", Shekhar Shah, said growth should be more inclusive, boost human development and address governance issues. There has been a rise in inequality.

For example, the richer southern states of India are growing 3 per cent faster than the poorer and more populous northern states. In addition, confrontational politics plagues countries such as India, Bangladesh and Sri Lanka.

In recent times, countries are responding to citizens' demand for public accountability by putting in place new mechanisms of information disclosure like the RTI.

The bank appreciated publication of citizen report cards in Bangalore that the rate quality of public services.