Opinion The Last decade was about fixing the economic plumbing. The next should be about reforms and execution
The last decade was about fixing the plumbing, building digital systems, physical infrastructure, and fiscal capacity. The next decade should be defined by consistent execution, especially at the state and municipal level,
The test ahead is whether private enterprise, local governments and institutions can fully exploit it. If they do, growth will be faster, broader and more inclusive. India’s economic story over the past decade is often told through quarterly GDP prints. That view, however, is incomplete. What stands out is not just the pace of growth but its nature. The economy has transitioned from a fragile one to one anchored in capital expenditure, digital rails, and institutional resilience. There has been a strong push to expand state capacity, build public goods, and make them more accessible. Yet, the real test lies in leveraging these foundations for sustained productivity and inclusive gains.
The most underappreciated shift in the labour market is the scale of formalisation. Payroll data show about 2 million net additions per month in recent years, a clear sign that digitisation and tax reforms are nudging firms into the formal net. Headline unemployment stabilising near 5 per cent adds to this sense of durability. However, formal jobs alone are not enough if productivity remains uneven. The rise in female labour force participation to nearly 40 per cent is encouraging, but much of this is still in low-paying or unpaid work. The focus must shift to job quality — to skill certification and apprenticeships.
Few policy successes are as apparent as electronics manufacturing. In a decade, India moved from importing most of its mobile phones to producing nearly all of them domestically. Electronics exports have surged nearly elevenfold in 11 years, supported by record public capital expenditure in FY25. But this success exposes a limitation. Manufacturing’s share of GDP remains stuck below 16 per cent, and electronics alone cannot carry the burden of employment generation at scale. Labour-intensive sectors such as textiles and toys have not yet seen the same breakthrough. Logistics costs remain higher than global peers and state-level execution varies widely. Aligning state incentives, simplifying compliance for MSMEs, and accelerating freight and port efficiency are essential if the electronics playbook is to be successfully copied.
Improvement in ease of doing business is one of the enablers of India’s recent investment cycle. Pruning of outdated laws, rollout of digital clearances, and faceless compliance have reduced friction. The fact that GST now covers 1.4 crore businesses underscores how administrative simplification has widened the formal base. Yet, for many small and mid-sized enterprises, the reality remains mixed. Regulatory overlap between the Centre and states, frequent rule changes, and legacy labour and land constraints continue to raise the cost of expansion. The next phase of reform must ensure that businesses’ experience aligns with policy goals and headlines. The goals of predictability over novelty must be realised by effective implementation and careful monitoring.
India’s poverty reduction story over the past decade is transformational, with more than 248 million people exiting multidimensional poverty. However, the uneven recovery between premium and mass-market consumption cannot be ignored. Premium consumption has surged while mass-market demand has recovered more slowly. This is often framed as rising inequality but is better understood as a sequencing issue in development. The next phase must focus on income mobility, not just income support. Welfare systems should increasingly act as launchpads, linking beneficiaries to skilling, micro-credit, local manufacturing clusters, and urban employment corridors.
The last decade was about fixing the plumbing, building digital systems, physical infrastructure, and fiscal capacity. The next should be defined not just by landmark reforms but also consistent execution, especially at the state and municipal levels. The test ahead is whether private enterprise, local governments and institutions can fully exploit it. If they do, growth will be faster, broader and more inclusive.
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