Stronger manufacturing would increase productivity and make growth more inclusive, while contributing to improved current account balance. In particular, India should aim for more formal jobs, as these tend to be the most secure and of highest productivity.
With India’s low life expectancy largely reflecting deaths from preventable diseases, the most significant gains in health would come from population-wide preventive measures.
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A major question for India concerns the agriculture sector’s contribution to national food security. India is the world’s second most populous country, and it has the largest number of farmers and rural population. About one-quarter of the world’s total food insecure people live in India.
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India has one of the world’s fastest growing economies, but a lack of skills among the working population is one of the main bottlenecks to higher and more inclusive growth.
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India adopted a broad-based strategic approach to e-government in 2006 through the National E-Governance Plan. The plan set out key priority areas such as the creation of shared data and service centres. However, these changes have so far had little effect on overall governance and citizens’ quality of life.
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India is regularly mentioned as one of the top global destinations for international investment, but it ranks outside the top 10 recipients worldwide. International multinationals cite factors such as retrospective tax legislation and rulings, strict labour laws, slow decision-making at the sub-national level, and poor infrastructure.
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India began its regulatory reforms in the early 1990s, reducing state involvement through the privatisation of companies, by putting in place independent regulatory mechanisms to boost competition and private-sector-led growth, and to strengthen consumer protection. But the reform efforts lacked coherence and, more recently, have stalled.
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India’s foreign value added content of exports was 22% in 2009 (the second highest in the BRIICS after China), up from 10% in 1995, illustrating an increased fragmentation of production and integration into global value chains, into which India could integrate even better.
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India’s urban population has risen by more than 150 million since 1990 and is projected to grow by a further 500 million by 2050. The specific challenges challenges facing Indian policy makers will be related to managing urban spatial expansion, improving infrastructure, and access to services and transportation.
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Faced by a serious and persistent water crisis owing to a growing imbalance of supply and demand, as well as poor water resource management and climate change, India is projected to face severe water stress by 2050.