What a Market Economy Offers India
While India’s economic success is taken for granted by some, per capita income and other measures show the development road remains a long one. It is also treacherous: A strategy that appears to work for the moment but is not sensible for the long term could stall progress for a decade. To navigate this road, India should embrace market liberalization tailored to its strengths as well as its sharpest challenges. In particular, clarification and formalization of rural property rights should have the highest priority. Simultaneously, the industrial labor market should be liberalized. As a complementary action, trade should also be liberalized to capture gains from what will be increasingly competitive manufacturing.