The World Bank on Wednesday stated that despite a large domestic market and cheap labour, India is still not an attractive destination for foreign investment thanks to corruption, regulatory burden and weak infrastructure.A World Bank report, prepared in association with Confederation of Indian Industry (CII), noted that though India may be a cost effective location for several industries relative to East Asia, significant transportation bottlenecks and infrastructure costs often wipe out India’s advantage compared to many other emerging market economies like China or Thailand.The report said reforms in three key areas of regulatory framework, infrastructure services and regulatory burden would greatly improve India’s competitive position. The bank noted that if India could achieve Chinese or Thai levels in distinct investment climate areas, its growth acceleration would be even more dramatic. It also said that the extent of corruption directly raise the costs of doing business in a location which can include direct cost of irregular payments, additional delays, increased management time spent clearing bureaucratic hurdles and uncertainty in carrying out decisions on time.The rate of making irregular payments to officials is about 90 per cent for India, the report noted.
