India : reducing poverty, accelerating development

Worldwide experience suggests that the primary conditions for sustained economic growth and poverty reduction are sound macroeconomic policies, open trade relations, and increases in human and physical capital. However, sustained development and poverty reduction also hinge on a comprehensive development framework. Markets need to be incentive based, yet regulated, functioning alongside an adequately supervised financial sector. Other prerequisites include effective health, education and social services, quality infrastructure and public services, and policies oriented to environmental and human development.

This World Bank Country Study for India is the first of its kind in the Bank's new comprehensive approach to country reports. It argues that reforms that reduce the risk of macroeconomic instability in such a framework would also be effective in reducing poverty - by increasing the access of the poor to human development, reducing distortions and expanding the demand for labour. In this context, the report:

⚫ reviews the performance of the Indian economy

analyses various facets of development identifies potential vulnerabilities

emphasizes the role of these reforms to overcome initial lags and increase the

pace of development in poorer states ⚫highlights the main areas for policy reforms as

-improvement in infrastructure, both public and private

expansion in core public activities through realignment of central and state governments

increased expenditure on health and education deregulation of goods and factor markets

privatization of areas such as power cuts in explicit and implicit subsidies

strengthening of the financial system, and

improvement of governance through streamlining of the legal system

Its statistical richness and analytical quality make this country report on India invaluable for the government, academia, business and financial circles. Students, teachers, and researchers will find it an indispensable resource.