The country’s poor infrastructure is the “biggest hurdle” to government’s flagship Make in India programme, S&P Global Ratings said today.
“Infrastructure is the biggest hurdle to the ambitious Make in India programme of the government,” S&P Global Ratings Credit Analyst Abhishek Dangra told reporters on a conference call.
The infrastructure deficit is costing up to 5 per cent of the GDP and an improvement will boost export competitiveness, according to some estimates.
However, he was quick to add that the export powerhouse of China also faces problems on the infrastructure front.
Every rupee invested in infrastructure development has a ripple effect and helps the GDP by Rs 2, he added.
The passage of the Goods and Services Tax, billed as the country’s biggest indirect taxation reform, will give a fillip to the logistics and manufacturing sectors, he said.
Dangra said there are problems in the country’s transportation sector with capacity constraints and underlined the need for better regulation.
“India’s transportation infrastructure sector could significantly benefit from a stable regulatory environment that has an independent regulator, appropriate dispute- resolution mechanisms and supportive, comprehensive policies,” he said.
Citing the case of the power sector, Dangra said better regulation has helped in a turnaround and we are looking to have a power surplus in 2016-17.