In post-independence India has leashed big ticket reforms to increase the roots of their economic engagement as a part or parcel of structuring Indian economy; however the watershed comes in the wake of 1991 reforms.
The Indian economy till then had been a closed economy following the path of self-sufficiency having little engagement with rest of the world. The idea of Liberalization, Privatization and Globalization changed the essence of Indian economy and trade numbers had been on an upward trajectory since then.
The contemporary India is in a transitory phase between the developing and the developed world.Contemporary Economy
Since 2008 the world economy had been in turmoil. The United States has witnessed failures of the big banks such as Merril Lynch, Lehman Brothers etc. The Europe on the other hand had been on a similar trend and certain reforms were in talks since then.
The Indian economy was even not rescued with the global trends. The recent dollar vs rupee crisis presents a bleak picture to this trend.Where Reforms are needed
Service Sector: The Indian economy is dominated by service sector contributing nearly 60% of the GDP share. The manufacturing sector remains at dismissal share of nearly 16% and agriculture nearly 14% of GDP which although employs bulk of the population of the country. The less valued manufacturing of the country in turn results large imports of the capital goods damaging Balance of Payment account; the imports needs to be whittle down.
Financial Sector: The Financial Sector Legislative Reform Commission constituted by the Govt. of India had been vocal for bring down current account deficit by garnering revenue through tax legislation and checking imports. The immediate impetus should be on long pending legislation such as Direct Tax Code and Goods and Service Tax. The GST model aims to increase tax base and compliance of the payers but has been trapped on issue of Federal distribution of Powers.
The Vijay Kelkar 13th Finance Commission has same agenda to work through. The commission recommended for a 3 year budget rolling reducing vagaries of tax imposition related issues. This will further aid the Corporates to better plan strategic business.
The C Rangrajan Committee on "Financial Inclusion" further recommended reforms to include masses in Fiscal network not only in banking but other Financial markets such as investment, insurance etc.
Telecom sector: The ICT technologies in contemporaries have contributed a lot in model governance and issues of Corruption, transparencies etc. has been brought under control. The mobile penetration in our country is approx. 76% percent; however the rural areas are still tinged at approx. 34% penetration making the telecom sector to undergo more reforms for making developments in the sector.
R&D Sector: The R&D sector of our country needs a robust backing in terms of Finances; India contributes nearly 1% of the GDP on R&D. The attitude needs to be changes and technology marathon needs to be started. The number of elite organization's such as ISRO, DRDO etc are bring laurels for the country such as the recent on MARS Orbiter Mission. The Light Combat Vehicle is another recent development adding to the list.
Education and Social Sector: The enactment of RTE Act 2009 was to change the scenario of literacy in India. The literacy rate stands at 74% which indicates that we are far behind of other countries such as China and other SE Asian counterparts. It has been categorically pointed out by experts that countries can only develop when people are literate. Though the RTE act mandates compulsorily the education of children of 6-14 years but circumstantial roadblock of the poor and lack of will among authorities has negated the right based approach of the model legislation. The reforms to make applicability of law needs to be worked out.Conclusion
The scope of reforms is many typically when compared with the period i.e 25 years ago as the demography of the country has changes a lot. The younger population of the country which we call "demographic dividend" needs to be shaped for rich dividend which need reforms in all sectors of governance to meets the pace of development when compared to other developing countries counterparts.