The power situation continues to be a major bottleneck to industrial growth.
Transport - India has a fairly developed road system. Given the countrys high density of population and scarcity of land, it is almost impossible to increase road capacity significantly in many cities. India has the largest railway network. Maintenance of transport infrastructure is generally poor. The rail network is saturated by both passenger and freight movement. Road and air network also need major investments in fresh projects and upgradation.
Telecom - Mediocre local and long distance services are provided throughout all regions of the country, with services primarily concentrated in the urban areas. Foreign participation in basic telecom services is limited to a maximum of 49 per cent of equity. Though the development and modernisation is ongoing, there is substantial potential for the development of telecommunication in India.
Manufacturing productivity and exports
Since the implementation of economic reforms in 1991, India has become increasingly integrated into the world economy. By promoting deregulation of domestic industry, liberalising rules for foreign investment, and reducing tariff and non-tariff barriers on imports, the authorities engaged deliberately on an outward looking development strategy, in which strengthening of export capacity is called upon to play a dominant role. The supply-side response of the economy to the structural reforms undertaken has been surprisingly good by international standards. After experiencing a slow-down in growth during 1992, the economy recovered quickly, reaching an average annual growth of 6 per cent in 1993-94, which accelerated further at above 7 per cent during 1995-97 (World Bank, 1996 and 1997).
Climate for growth
Prevailing political and social climate also can contribute as a retardant or a fuel for growth. The public corruption and stock market manipulations etc. will have significant pact on savings and investment behaviour. The interest rates have been slashed down. Public has to direct investment towards primary or secondary markets. These markets are manipulated to the peril of the investors. Although we have a fertile ground for good crop and growth retardants, uncertainties are many. A political consensus is necessary to tide over many of the retardants before they become serious inhibitors to globalisation and integration with global economy.