HSBC India CEO underscores need for infrastructural development

Ahmedabad, Nov 26 (UNI) HSBC India CEO Naina Lal Kidwai today underscored the need to invest more in infrastructure if a 10 per cent GDP growth rate is to be achieved.

She was speaking at the IIMA Confluence-2006 seminar on ''Cyclical Thoughts: Hitting the Growth Peak?'' here today.

Ms Kidwai pointed out that India was not attracting the desired foreign FDI and even Brazil had 25 per cent more FDI.

Referring to Malaysia, Ms Kidwai said that it had invested heavily in developing ports and airports. ''Infrastructure is a serious issue, as we are six times lower than China, which invests 10 times more on roads than India,'' she said.

Ruing the poor infrastructural facilities in the country, she pointed out that it takes ships three to five days to turn around at our ports, while this is a matter of hours in Singapore and Hong Kong.

She further cited the example of Himachal Pradesh where 40-60 per cent of fruits fail to reach the markets owing to a lack of cold storage.

Ms Kidwai, however, described the Indian economy as ''very vibrant'' and there is a tremendous sense of optimism in the economy. With exports at five per cent and imports at six per cent of the GDP, the outlook is upbeat, she said.

The Indian external debt is comfortably placed at 22 per cent and equity market too is very good. ''Our underpinnings (of stock market) of the economy is very strong,'' Ms Kidwai said.

Can the GDP growth go into double digits? Ms Kidwai was not prone to looking at absolute figures. ''Ours is an economy which is less dependent on exports. However, since 1991, there has been an upward trend in exports. But, agriculture however is a drag on GDP growth,'' she said.

Presently, the services sector is the biggest contributor with 52 per cent, while industry contributes 27 per cent and agriculture 21 per cent. Both service and industry are looking up while agriculture is going down, she said.

The income disparity, as per the Gini coefficient (used to measure income inequality), she said, is at 32 per cent which is not too bad. However, inequality is rising and this may be the price we have to pay as we march ahead, she said.

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