Sustaining High Rates of Economic Growth in India

Keeping the current state of the economy in mind and the on-going process of economic reforms, we suggest measures to strengthen India's growth strategy. Briefly put, we suggest a strategy focusing on export-led growth, which among other things requires greater emphasis on special economic zones, and openness of the economy, liberalization in India's labor laws, de-reservation of products for the small scale industry and other measures for the deregulation of India's private sector. Second, fiscal consolidation, which urgently requires expenditure reform to include a much smaller level of explicit and implicit subsidies, large scale disinvestment of India's public sector, and a major reduction in the size of the government, among other things. Third, global competitiveness so as to attract large-scale foreign direct investment for infrastructure development and export-oriented activities, and finally, liberalization and deregulation of India's information technology industry.