The next five reforms India needs

  • January 16, 2026
  • Social Issues

Business Standard

The next five reforms India needs

Core Theme and Context

The article is a forward-looking policy prescription that argues India’s high-growth trajectory over the next two decades depends on a new generation of structural reforms, beyond incremental adjustments. Written in an opinionated, reformist tone, it seeks to identify priority areas where decisive state action can unlock productivity, competitiveness, and long-term resilience.

The piece positions reforms not as ideological choices, but as economic necessities shaped by global competition, demographic pressure, and fiscal constraints.

Key Arguments Advanced

1. Reform Momentum Must Be Sustained Beyond Cycles

The author argues that India has benefitted from past reforms, but growth cannot be sustained through:

  • Episodic policy announcements
  • Crisis-driven adjustments

Instead, reforms must be continuous, institutionalised, and politically durable, cutting across electoral cycles.

2. Five Reform Pillars as Growth Enablers

Although framed as “five reforms,” the arguments broadly cluster around:

  • Factor Market Reforms: Improving efficiency in land, labour, and capital deployment.
  • Urban and Infrastructure Governance: Cities as engines of productivity, requiring better planning, financing, and service delivery.
  • Human Capital and Skilling: Aligning education and skills with future labour market needs.
  • State Capacity and Regulation: Simplifying compliance while strengthening enforcement.
  • Fiscal Prudence with Growth Orientation: Managing debt and subsidies without stifling investment.

The thrust is on quality of growth, not merely headline GDP numbers.

3. The State as an Enabler, Not a Micromanager

The article advocates a state that:

  • Sets clear rules and long-term direction
  • Invests in public goods
  • Steps back from operational micromanagement

This reflects a market-friendly but state-capacity-driven philosophy.

4. Time Sensitivity of Reform Window

A recurring argument is urgency: demographic advantage, global supply-chain realignments, and geopolitical shifts offer a narrow window of opportunity. Delay, the author warns, risks stagnation before India becomes a high-income economy.

Author’s Stance

The author’s stance is decidedly reformist and technocratic:

  • Strong faith in structural reforms as growth drivers
  • Confidence in policy rationality and administrative execution
  • Emphasis on long-term economic logic over short-term political costs

The tone suggests insider familiarity with policymaking, privileging feasibility from a governance perspective.

Biases and Underlying Assumptions

1. Pro-reform, Pro-market Bias

The article assumes:

  • Reforms will automatically translate into inclusive outcomes
  • Market efficiency will eventually address distributional concerns

Social and political resistance to reforms is acknowledged but understated.

2. Underplaying Federal and Social Constraints

While advocating reforms, the article gives limited attention to:

  • Centre–State coordination challenges
  • Uneven administrative capacity across states
  • Political economy of land, labour, and urban reforms

3. Growth-Centric Framing

The piece prioritises growth acceleration, sometimes at the expense of:

  • Environmental trade-offs
  • Short-term livelihood disruptions
  • Equity concerns

Pros of the Argument

  • Clear articulation of long-term structural priorities
  • Integrates global economic trends with domestic reform needs
  • Moves debate beyond welfare-versus-growth binaries
  • Useful roadmap for aspirants to understand policy thinking at the highest level

Cons and Limitations

  • Limited discussion on sequencing and safeguards
  • Insufficient focus on institutional accountability mechanisms
  • Reforms presented more as consensus solutions than contested political choices

Policy Implications

1. Governance and Administration

  • Need for stronger regulatory institutions, not just deregulation
  • Professionalisation of urban and infrastructure governance

2. Economic Policy

  • Shift from subsidy-led interventions to productivity-enhancing investments
  • Stable, predictable policy frameworks to crowd in private investment

3. Social Compact

  • Reforms must be accompanied by credible social protection to maintain legitimacy
  • Skill and labour reforms require trust-building with workers and states

Real-World Impact

If implemented coherently, the proposed reforms could:

  • Raise potential growth and employment generation
  • Improve India’s global competitiveness
  • Strengthen fiscal sustainability

If pursued without consensus or capacity-building, they risk:

  • Political backlash
  • Reform fatigue
  • Uneven regional and social outcomes

UPSC GS Paper Alignment

GS Paper III – Indian Economy

  • Structural reforms, growth models, infrastructure, fiscal policy

GS Paper II – Governance

  • State capacity, regulatory frameworks, Centre–State relations

GS Paper IV – Ethics

  • Balancing efficiency with equity
  • Responsibility of policymakers toward vulnerable groups

Balanced Conclusion and Future Perspective

“The next five reforms India needs” is a confident, growth-oriented call for second-generation reforms anchored in state capacity and market efficiency. Its strength lies in long-term clarity and strategic urgency. However, reforms are not merely technical exercises; they are deeply political and social processes. For India to convert reform ambition into durable progress, sequencing, inclusion, and institutional trust will be as critical as policy design. The future challenge is not identifying reforms, but executing them in a way that sustains growth while preserving social cohesion.