OECD's first economic survey of the Indian economy. It opens with a broad overview of economic developments over the past twenty years, showing how India has grown to become the third largest economy in the world. It then examines a series of specific policy areas including the unbalanced growth across states, competition policy and reforming India's product and service markets, improving the performance of labour markets, improving the financial system, improving the fiscal system, improving infrastructure, and upgrading the educational system. For each policy area, a series of recommendations is made.

The OECD is a unique forum where the governments of 30 democracies work together to address the economic, social and environmental challenges of globalisation. The OECD is also at the forefront of efforts to understand and to help governments respond to new developments and concerns, such as corporate governance, the information economy and the challenges of an ageing population. The Organisation provides a setting where governments can compare policy experiences, seek answers to common problems, identify good practice and work to co-ordinate domestic and international policies.

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Executive summary

Assessment and recommendations

Chapter 1. India’s key challenges to sustaining high growth
Economic reforms have transformed the Indian economy
The economy has responded positively to the reforms
Looking into the future
Easing regulation in goods and service markets
Removing barriers to employment in the formal sector
Improving the efficiency of the financial system
Orienting public finances to achieve more rapid growth
Improving infrastructure
Improving education
Conclusions
Notes
Bibliography

Chapter 2. India’s growth pattern and obstacles to higher growth
Productivity gains from shifting labour out of agriculture have been modest
Manufacturing’s contribution to growth could be much greater
Evidence suggests that weaknesses in framework conditions are at fault
Notes
Bibliography

Chapter 3. Reforming India’s product and service markets
Despite extensive liberalisation in some areas regulations are on average rather restrictive
Policies to improve product market regulations
Notes
Bibliography
Annex 3.A1. OECD PMR indicators by state

Chapter 4. Improving the performance of the labour market
Employment has expanded in the economy as a whole, but not in the organised sector
State-level labour reforms
What can feasibly be done to improve India’s labour markets?
Notes
Bibliography
Annex 4.A1. State labour reform questionnaire summary responses

Chapter 5. Reforming the financial system
The banking system
Other financial markets
Foreign ownership
Financial inclusion
Conclusions
Notes
Bibliography

Chapter 6. Improving the fiscal system
Improving the quality of government spending
India’s tax system has been fundamentally reformed
Improving fiscal federalism to limit borrowing and increase responsiveness to local needs
Notes
Bibliography

Chapter 7. Removing infrastructure bottlenecks
Infrastructure is a major constraint on growth
The private sector has a crucial role to play in narrowing infrastructure gaps
Private sector involvement is transforming certain sectors
A more limited start has been made in other sectors
In other sectors, the framework is not conducive to competition
Notes
Bibliography

Chapter 8. Improving human capital formation
Human capital needs to be improved
Deeper institutional changes are the best hope
Conclusion
Notes
Bibliography