Infrastructure deficit biggest obstacle for 'Make in India': Standard & Poor's

Infrastructure deficit is the biggest obstacle to the government’s flagship ‘Make in India’ programme, as per International credit rating agency Standard & Poor's(S&P). The rating agency said that the infrastructure deficit is costing up to five per cent of the country’s GDP and an improvement will boost export competitiveness. It added that Asia’s largest economy China also faces problems on the infrastructure front.

In its latest report S&P stated that there are problems in the transportation sector with capacity constraints and highlighted the need for better regulation. It added that 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. It also noted that the government is scaling up spending, but its heavy debt burden could derail its ambitions to improve public infrastructure.

It further said that India Inc. will see a turnaround in performance soon. It also said that revenue growth is expected to move up in the next 2-3 years and this will be possible largely on increased government spending and the consequent increase in domestic economy.

The Rating agency also said that the passage of the Goods and Services Tax Bill, billed as the country’s biggest indirect tax reform, will give a boost to the logistics and manufacturing sectors. It also said that every rupee invested in infrastructure development has a ripple effect and helps the GDP by Rs 2.