Asian Development Bank on Monday said India needs to increase investment rate and improve productivity on a massive scale if its economy was to expand beyond 7-8 per cent.
The Manila-based bank also called for full pass through of high oil prices to consumers and better targeting of subsidy.
"India has come a long way growing by 7-8 per cent. But to ratchet it up further, India has a long way to go," ADB chief economist Ifzal Alli said here, adding that "investment rate has to go up rapidly and productivity improved on a massive scale."
He said the major challenge before India is to provide productive and decent employment to people as the economy grows inclusively.
Infrastructure needs to be developed rapidly and manufacturing base expanded, so that growth is not merely led led by the services sector, Alli said.
"There are high growth rates but not enough jobs and most of the jobs are created in informal sector, where work conditions are not good," he said.
New Delhi's move to curtail fiscal deficit is good for the country, but it has to do lot more in the revenue side and expenditure side, he felt.
Despite high oil prices, growth rate in India has not slowed down due to high forex reserves and tightening of monetary policy with macro economic balance.
"This shows the resilience of the Indian economy," he said.
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