There is anxiety among investors not only on the pace and nature of economic reforms but also political stability in India, a top World Bank official has said.
This, he said, could be the possible reason for slowdown in investment, both domestic and foreign, in the country.
"India is not starting from a position of collapse in investment in any way," Martin Rama, chief economist (South Asia), World Bank, told a group of Indian reporters on Wednesday.
"But I think there certainly is in the minds of investors an expectation and anxiety on the progress on reforms and on the kind of stance that the new government would have -- whether it would be a coalition government or not a coalition,"
he said.
"So there is wait and see," Rama said in response to a question on whether the pace of investment in India is expected to remain slow.
"That is a fact. We see the Finance Minister, P Chidambaram going to many countries trying to reassure investors and the commitment of the government to implement these reforms early is probably the right step to take," Rama said.
A report on South Asian countries released by the World Bank on Wednesday said that India's continuing slowdown is broad- based across sectors.
"Vulnerabilities, mainly due to a wide current account deficit and high inflation, reducing macro buffers and increasing reliance on investment persists.
Slower growth and tighter fiscal space may affect India's progress towards universal health coverage," the report said.
