Abstract: On the reform front, the government needs to create enabling environment for the unskilled-labour-intensive industry. Paradoxically, despite its large endowment of unskilled labour, the fastest growing sectors in India are either capital intensive (automobile, auto parts, steel and petroleum refining) or skilled-labour intensive (pharmaceuticals, software and the financial services). Additionally, the government must bring electricity and reliable roads to the rural economy, repeal the Essential Commodities Act, 1955 and persuade the states governments to adopt reforms that better connect the farmers to the marketplace via direct sales to retailers, contract farming and food processing.
The author is a professor at Columbia University. This article draws on his forthcoming book, India: The Emerging Giant, to be published by OUP, New York