Wednesday, October 10, 2007

India soaring - but so much left to do...

From Securing India’s place in the global economy - Adil Zainulbhai, McKinsey Quarterly:

Sustaining inclusive economic growth will require the country to focus on improving its infrastructure, both hard and soft, and on creating a thriving labor market.

To improve the infrastructure significantly on a nationwide scale, the government will also have to undertake systemic reforms. Immediate action is needed in a number of areas: land market barriers (unclear land titles and insufficient databases, for instance); inadequate long-term financial instruments to meet the equity and debt needs of large infrastructure projects; weak policies and regulations...

...state governments must repeal the Urban Land Ceiling Act (which restricts the amount of land available for housing), resolve unclear land titles by creating fast-track courts, computerize land records, raise property taxes, and change the tenancy laws.

...the government might create pilot focused-education zones, where educational institutes could be set up with complete autonomy in admissions, fees, course offerings, faculty recruitment, and delivery and evaluation methodologies.

McKinsey research suggests that during the next ten years India will need more than 10,000 public-health professionals to supply preventive health services. These experts will also be needed to train 500,000 volunteers...

...an almost limitless labor supply and consumer demand. Yet this mass of people could become one of the greatest forces against reform if they can’t find jobs; in 2003, for instance, the labor force grew by 12 million, but employment in the organized private sector fell by 200,000. India absolutely must create a thriving labor market not only to shift workers from agriculture to higher-value-added activities but also to absorb a growing workforce and sustain social equilibrium.
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