The Investment Climate in 16 Indian States
In this paper, the author attempts to identify the characteristics of the business climate in India that can help explain the different performance of individual states in terms of investment and growth. The paper develops a new Investment Climate...
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
2012
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| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090112151008 http://hdl.handle.net/10986/4014 |
| Summary: | In this paper, the author attempts to
identify the characteristics of the business climate in
India that can help explain the different performance of
individual states in terms of investment and growth. The
paper develops a new Investment Climate Index aimed at
summarizing the aspects of the business environment that
entrepreneurs consider when deciding whether to invest.
Using this index, the author explores the investment climate
in several typologies of Indian states and identify the key
features of a poor business environment in India. The
analysis shows that infrastructure and institutions remain
the main bottlenecks in the country's private sector
development. More specifically, power, transportation,
corruption, tax regulations, and theft are major factors
explaining the poor business environment in some Indian
states. Infrastructure appears to be the single most
important constraint, as it is particularly binding in
states that show low levels of domestic investment and GDP growth. |
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