The top 10 challenges for India

1. Improve governance
Without better governance, delivery systems and effective implementation, India will find it difficult to educate its citizens, build its infrastructure, increase agricultural productivity and ensure that the fruits of economic growth are well established.

2. Raise educational achievement
Among more micro factors, raising India's educational achievement is a major requirement to help achieve the nation's potential. According to our basic indicators, a vast number of India's young people receive no (or only the most basic) education. A major effort to boost basic education is needed. A number of initiatives, such as a continued expansion of Pratham and the introduction of Teach First, for example, should be pursued.

3. Increase quality and quantity of universities
At the other end of the spectrum, India should also have a more defined plan to raise the number and the quality of top universities.

4. Control inflation
Although India has not suffered particularly from dramatic inflation, it is currently experiencing a rise in inflation similar to that seen in a number of emerging economies. Thea authors of the report think that a formal adoption of inflation targetting would be a very sensible move to help India persuade its huge population of the (permanent) benefits of price stability.

5. Introduce a credible fiscal policy
The Goldman Sachs report says that India should introduce a more credible medium-term plan for fiscal policy. Targeting low and stable inflation is not easy if fiscal policy is poorly maintained. It would be helpful to develop some 'rules' for spending over cycles, the report adds.

6. Liberalise financial markets
To improve further the macro variables within the GES framework, the report believes that further liberalisation of Indian financial markets is necessary.

7. Increase trade with neighbours
In terms of international trade, India continues to be much less 'open' than many of its other large emerging nation colleagues, especially China. Given the significant number of nations with large populations on its borders, the Goldman Sachs report recommends that India target a major increase in trade with China, Pakistan and Bangladesh.

8. Increase agricultural productivity
Agriculture, especially in these times of rising prices, should be a great opportunity for India. Better specific and defined plans for increasing productivity in agriculture are essential, and could allow India to benefit from the BRIC-related global thirst for better quality food.

9. Improve infrastructure
Focus on infrastructure in India is legendary, and tales of woe abound. Improvements are taking place, as any foreign business visitor will be aware, but the need for more is paramount. Without such improvement, development will be limited.

10. Improve environmental quality
The final area where greater reforms are needed is the environment. Achieving greater energy efficiencies and boosting the cleanliness of energy and water usage would increase the likelihood of a sustainable stronger growth path for India.
The Goldman Sachs report adds that not all these 'action areas' can be addressed at the same time, but in coming years progress will have to be made in all of them if India is to achieve its very exciting growth potential.