India faces a shortfall of as much as $190bn in financing key infrastructure projects as the global crisis chokes off urgently needed capital, according to a study by McKinsey, the management consultants.

Hard road: cash constraints are slowing India’s transformation to a more modern economy

Infrastructure development is one of the most important challenges facing New Delhi as it strives to sustain high levels of economic growth. The Indian government has identified the need for $500bn (€385bn, £357bn) in infrastructure spending between 2007 and 2012. But a liquidity squeeze in the local banking system and the draining away of foreign investment has cast doubt on this goal.