"Reform, in the face of popular resistance and vested interest, is hard. For India, this difficulty is compounded by the additional challenge of coalition government especially when that coalition is drawn from a wide range of the political spectrum," Lehman Brothers said in the report released on Tuesday.

It, however, said that a window of opportunity exists after the next general elections to continue with reforms even though neither Congress nor the BJP are likely to win elections on their own.

The report, titled 'India: Everything to Play For', said the Left parties are likely to block any reform that requires new legislation.

"This highlights the contrast between the communists at the national level, who enjoy leverage without responsibility, and those at the state level whose administrations are pushing through reform," the report said, adding that at the time of going to print the communists were continuing to threaten to withdraw their support over the Indo-US nuclear deal.

Projecting India's economy to grow by 10 per cent in next decade if it continued with structural reforms, the global investment bank said: "However, pushing through structural reforms will remain a political challenge in the face of headwinds from vested interest and coalition politics. That said, there should be a new window for reform after the next general election due in 2009."

On India's estimate that infrastructure, crucial for high economic growth, requires $492 billion investments, 30 per cent of which would come from private sector, the report doubts whether India Inc is capable of raising this kind of sum despite its impressive profits as the country still has a fledgling debt market.

"And, whether or not the corporate debt market can develop hinges to a large extent on pension reform, which is effectively blocked in parliament by the communists on whom the current INC-led minority government depends for its survival," the report said.

The global investment bank said though the Left front has been accommodating on some issues, notably foreign investment, it has continued to oppose many reforms put forward by the government, especially those relating to deregulation of the labour market and privatisation.

In 2005, it boycotted coordination meetings with the UPA for four months until the government abandoned a reform package. "And, if anything, it has become even more assertive since the communists secured landslide victories in state elections in West Bengal and Kerala in the first half of 2006."

However, the global investment bank finds a new window for economic reform after the next general election, which must be held no later than May 2009 even though the days of the Congress commanding a majority appear to have gone forever.

Neither the main opposition BJP nor the Congress looks likely to be able to secure much more than 25 per cent of the total vote in future general elections, it said.