India 'needs huge services boost'

Firms want India to boost its spending on roads, ports and railways

India needs to invest $331bn (£173bn) on infrastructure over the next five years if it wants to maintain its rapid economic growth, a study suggests.

Research for the Confederation of Indian Industry (CII) found India needed to spend 8% of its gross domestic product on new infrastructure.

The CII said India was spending much less on services like roads and ports than China and other Asian countries.

India's economy is currently growing an annual rate of just over 8% a year.

But experts have warned that this growth will slow if the country cannot build enough new roads, ports, airports and power stations.

The CII said that India was expected to spend about $47bn on infrastructure in the fiscal year to March 2007, a figure which needs to be doubled to $84bn a year by 2012.

The industry body added that an investment strategy needed to be drawn up between the government, regional states and the private sector.