The Hindu Business Line : Poor infrastructure hinders investment in India: KPMG

THE Indian manufacturing sector offers better return on investments as compared other emerging markets, including China, according to the consulting firm KPMG. In a report titled `Manufacturing in India,' KPMG has said that India's large human and natural resources, its legal framework, abundance of technical and managerial talent and a demographic advantage with a large young population come together to make the country a viable investment destination.

The main hurdle to investments, according to the report, continues to be the poor state of the country's infrastructure. "Even corruption does not come out as a very strong point as a deterrent when compared with the state of India's infrastructure," the report said.

According to Mr Ian Gomes, Country Managing Director - India, KPMG: "When compiling this report, it quickly became clear just how many advantages India has over other developing economies such as China, Brazil and Mexico. "However, the number of comments we had, which singled out the internal infrastructure — the road network, the ports, the distribution networks and in particular, the power supply — as a possible barrier to investment is worrying. Without doubt, improvements are being made in this area but not quickly enough in many companies' minds."

On the positive side, the report cites India's demographic advantage wherein its working age population will continue to grow for the next two decades at least, while China's is now beginning to decline. According to the report, many companies interviewed for the KPMG report did mention that corruption is not their major concern, indicating that it is starting to come under control.

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