Blackstone Group LP's Indian business unit said that the firm is discovering fewer number of opportunities in India. The company said serious public governance issues could jeopardize and erode investor confidence. The statement came amid India's slowest pace of economic expansion in a decade.

Blackstone said it had become more cautious in Asia's third largest economy.  Blackstone Indian unit chairman Akhil Gupta said in an interview that it was becoming a lot more challenging for the Indian government to make the ideal decisions. "The most prudent assumptions made of India are turning out to be highly optimistic. One doesn't see a way out. I haven't ever seen such pessimism when we talk to Indian company or government officials," Mr. Gupta said.

New York-based Blackstone is just one of the many groups of investors deterred by a shift in policy after a string of corruption allegations stopped Prime Minister Manmohan Singh's administration from functioning optimally.

Blackstone Group is the world's largest manager of alternative investments with assets in real estate and private equity.