The private sector strongly feels that India is a difficult place to do business in due to many regulations, World Bank President Jim Young Kim said on Thursday, calling for necessary reform to create a better environment and spur growth.
"The private sector has the strong sense that India is a difficult place to do business in because of so many regulations and government regulations that are a bit unpredictable," the World Bank President told journalists at a round table with media representatives from eight countries.
The media representatives from India, China, Mexico, Brazil, Indonesia, Bangladesh, South Africa and Tunisia took part in the round table.
"This is the direct impression that many private sector players have and we know very well that the Indian government, especially the leadership knows this very well and they're moving in a direction to try to improve that," Kim said during the media round table, held on the sidelines of the annual Spring Meeting of the International Monetary Fund and the World Bank.
Kim was highly appreciative of the top Indian leadership including Prime Minister Manmohan Singh and Finance Minister P Chidambaram.
He was also appreciative of Reserve Bank Governor Raghuram Rajan. Kim said all of them were well aware of the difficulties and what needs to be done to address such challenges.
"The Central Bank (RBI) Governor Mr Rajan has already announced some financial sector reforms that I think (they) are very promising.
The thing that strikes me is that when I speak with for example Finance Minister Chidambaram and, you know, Prime Minister Singh, they know exactly what needs to be done," he said.
"We know that for example there has to be reform in terms of government regulations so that the private sector can really take off," World Bank President said in response to a question.
Noting that India is very focused on improving its educational system, he said, one of the things "we know now" is that investing in human beings, improving health outcomes and investing in education, is extremely important for economic growth.
India understands that and is trying to move in that direction, he said.
Kim said he is working with the Indian government on ideas to improve their healthcare system.
"They know they need to make progress in those areas. But I think that there is a lot that India can do to improve its business environment," the World Bank President asserted.