AS per OECD latest Report, India
has rebounded swiftly after the global economic crisis, but is experiencing
a slowdown in economic growth since 2012. In order to maintain robust
growth, India needs to address its infrastructure shortfalls, pervasive
state control in business activities, and unequal access to quality education.
It also needs to reconsider overly stringent labour regulations which
hinder job creation in the formal sector and leave most workers with no
formal labour contract and social coverage.
Previous Going for Growth recommendations include:
- Increase the provision and efficiency of education services by enhancing teacher effectiveness and
increasing teaching resources and autonomy in schools.
- Reduce the onerous dismissal restrictions applied to large firms in order to increase dynamism and
formal employment in labour market.
- Reduce barriers to foreign trade and investment by reducing foreign ownership restriction in various
industries and pursuing common tariff rate among manufactured products.
- Promote more effective infrastructure-related regulation by streamlining land acquisition process
and reducing regulatory uncertainty to promote private investment.
- Undertake wide-ranging financial sector reforms such as easing bank portfolio restriction and
allowing greater participation of foreign investors in financial services sector.
Actions Taken: Notable reforms in these areas over the past two years include:
The report also discusses the possible impact of structural reforms on other policy objectives (fiscal
consolidation, rebalancing the current account and reducing income inequality). In the case of India, a more
inclusive education system would help reducing severe poverty and inequality, while labour market reform
would help reduce informality.
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