Crisis? At India forum, it's back to business as usual

But there appeared genuine optimism that Singh and economic policymaker Montek Singh Ahluwalia, architects of India's ground-breaking market opening in 1991, now have the clout to fend off political pressures.

CUTTING THE KNOT

For many investors, financial reform could be the sword to cut the gordian knot.

India's savings rate is nearly 40 percent of GDP, but a restrictive and underdeveloped financial system means little is funnelled to capital markets to help fund, for example, the $20 billion a year the government wants to raise for highways.

Robert Morrice, chairman and chief executive of Barclays Asia Pacific, pointed out that around 40 percent of India's household savings was invested in physical assets like gold -- hardly the stuff of productive investments.

The government plans to introduce in parliament by December long-delayed bills proposing raising foreign stake limits in the pension and insurance sectors.

"To get 9-10 percent growth rates, India will need reform," said Kevan Watts, head of Bank of America Merrill Lynch in India. "They have to ensure domestic capital flows into investments."

But participants warned that there were also far deeper problems to solve -- higher hanging fruits for a government apparatus that is notoriously slow and bureaucratic.

"Less than half of India has access to a bank account," said Kalpana Morparia, chief executive officer of J.P. Morgan in India. "It's not just about insurance and pensions."

Getting India's obselete infrastructure moving, and helping reduce growth bottlenecks, was for many the biggest challenge. The government has said it needs to spend $500 billion in the five years through 2012 on infrastructure.

But many question whether the Congress party, beholden to a rural base wary of change, can carry out bold reforms. And officials admitted there was little chance that India could emulate China's quick building of roads, ports and airports.

"We are not only the loudest democracy, but the rowdiest," said Kamil Nath, the transport minister.