Mumbai: World Bank today (Nov 24, 2004) said India should reduce entry and exit barriers for manufacturing sector and remove infrastructure bottlenecks for improving investment climate and also hike investment rate to 30 per cent to sustain eight per cent economic growth.

"Atleast two interrelated sets of regulatory and institutional reforms are needed in order to improve India's investment climate," World Bank said in its report "India Investment climate Assessment 2004" released in Mumbai.

The first comprises a set of regulatory reforms, including reducing entry and exit barriers to manufacturing industries, addressing impediments to the smooth functioning of labour, land and product markets and streamline regulation of business start-ups and bankruptcy procedures, it said.

The second reform set should address physical infrastructure bottlenecks and weaknesses in the financial and other business services, it said. On sustaining high economic growth rate, multilateral agency said "in order to sustain a growth rate of eight per cent over the long term India must raise its investment rate to about 30 per cent from the current 23 per cent."

This rise would require steep increases in the ratio of corporate sector's investment to GDP, and particularly in the industrial sector, which has the greatest potential to provide high-wage employment for the 70 per cent of the labour force now working in agriculture, it added.