The World Bank's South Asia Region has recently published a Development Policy Review on India.
From the report:
India’s recent growth performance has been spectacular; the country remains one of the fastest growing economies in the world. But these achievements have created new challenges. The India Development Policy Review 2006 titled "Inclusive Growth and Service Delivery: Building on India's Success" focuses on two major challenges facing the country today: improving the delivery of core public services, and maintaining rapid growth while spreading the benefits of this growth more widely.
Core public services: It is essential for India’s rapidly growing economy to improve the delivery of core public services such as healthcare, education, power and water supply to all its citizens. This means empowering its people to demand better services through reforms that create more effective systems of public sector accountability. Options include decentralizing to local governments, producing regular and reliable information for citizens, undertaking internal reforms of public sector agencies, or creating public-private partnerships. But ultimately, implementation is everything.
Rapid and inclusive growth: Maintaining rapid growth will require more, and more effective, investments in infrastructure to create more jobs for low and semi-skilled workers.
Growth should more equally shared by all, as many parts of the country remain poor. Promoting inclusive growth includes revamping labor regulations, improving agricultural technology and infrastructure, helping lagging states and regions catch up, and empowering the poor through proactive policies that help them to take part in the market on fair and equitable terms.
The full report, Q&A with the authors and more information on the subject available on-line: