Getting India back on track: India's top thinkers show the way forward
THE policy prescriptions in almost every sector of the Indian economy are contained in a book titled 'Getting India Back of Track: An Action Agenda for Reform' by 17 top thinkers, launched yesterday with a panel discussion organised by FICCI. Some of the suggestions:
Recognise the imperative of growth: India must return to high rates of economic growth over a long period of time to correct its current developmental deficiencies. Policymakers should aim to sustain India's economic transformation over the secular period as they implement the next generation of reforms, which generally pertain to liberalizing factor markets (in contrast to a previous wave's focus on product markets).
Increase reliance on markets for efficient allocation: Policymakers should examine their long-standing assumption that state intervention is the best possible instrument for making allocation decisions in the economy. Wherever possible, private goods should be produced and distributed principally through market mechanisms. State resources should be utilized mainly for producing collective goods or those private goods that are hard to produce through the market because of misaligned incentives.
Rebuild state capacity: Reforms should increase the state's currently rather weak capacity to do what only governments can do - build institutions for effective rule-making, administration, and adjudication.
Shift the locus of reform from the centre to the states: Decisions about economic and social policy in the future should be made at the lowest possible levels of competent authority, meaning India's states.