India can grow at 8%; the time is right to draw investment, says World Bank President

India faced challenges during the Covid-19 pandemic but has recovered "strongly" and can achieve 8% growth through a stronger private sector, land and agriculture reforms, and ensuring credit gets to small enterprises, among others, said David Malpass, president of the World Bank.

This is the right time for India to attract investment amid a global diversification of supply chains and manufacturing, he told ET in an interview, calling for a focus on making the country competitive. Malpass is in India to attend a meeting of G20 finance ministers and central bank governors. He met Prime Minister Narendra Modi and finance minister Nirmala Sitharaman on Wednesday.

On global monetary tightening, the outgoing World Bank chief said interest rates were abnormally low over the past decade and the world should plan on this normalising. He warned that developing countries, in particular, are facing much higher financing costs and interest rates on their debt.

Supply chain diversification
Malpass also said the world should do more about climate change, particularly in the area of adaptation.

The World Bank is working on debt restructuring for those countries that have unsustainable levels of debt, "which in the current environment (is) a high percentage of the countries," he said. It "is clear now that there had been too much dependency by Europe on Russia for energy and too much dependency by the world on China," and a healthy diversification was underway.

India could benefit from some of this supply chain and manufacturing diversification. "I think there's good potential for India to attract more... I really think that this is a moment where India can make progress," said Malpass, underscoring the areas where policy changes would help.

The country needs to focus on competitiveness, and that means regulatory policies that boost skills to encourage investment, both domestic and foreign, he said, reiterating the World Bank's strong support for India.