Tuesday, June 21 2005 19:09 Hrs (IST) - World Time -

Bangalore: The World Bank today (Jun 21, 2005) said India should accelerate economic reforms and attract larger private investments, which would catapult its economic growth to higher levels.

"It is important to accelerate reforms to unleash the entrepreneurial energy to continue with the high economic growth and to reach higher economic growth and reduce poverty," World Bank India director Michael Carter said at a workshop on "assessing the investment climate in Karnataka".

He said India has an intrinsic advantage of attracting lot of private investors and is becoming a major hub for manufacturing and labour intensive services.

"But its (India's) record in attracting private investment has not been impressive as it should be", Carter said, adding, private investments accounts for only 1.5 per cent of the GDP.

FDI into India of one per cent of the GDP compares unfavourably with four per cent in China and two to three per cent for a range of emerging markets, he said.

Critical of the bad infrastructure in most parts of the country and the 'license raj' in States, Carter said, while the 'license raj' has reduced at the national level, it is still an issue in States. He said labour policies were also a concern.

"Reforms can challenge the interests of the privileged group, but the long term benefits of reforms can be achieved only by tackling these interests in a candid and forceful way," he said, adding, access for finance was also a major issue in India.