The OECD today said India needs to address its infrastructure shortfalls and pervasive state control in business activities, among other things, to maintain robust growth.
In its 'Going for Growth' report, the Organisation for Economic Co-operation and Development (OECD) called for structural policy reforms to boost growth.
"To maintain robust growth, India needs to address its infrastructure shortfalls, pervasive state control in business activities and unequal access to quality education.
"It also needs to reconsider overly stringent labour regulations which hinder job creation in the formal sector and leave most workers with no formal labour contract and social coverage," the OECD said.
India needs about USD 1 trillion for infrastructure projects in the 12th five-year plan period ending March 2017, half of which is expected to come from the private sector.
According to the International Monetary Fund (IMF), the Indian economy is projected to expand 4.6 per cent in 2013-14 and pick up to 5.4 per cent in 2014-15. The growth rate had fallen to a decade-low level of 4.5 per cent in 2012-13.
The OECD said the global economic crisis dented potential growth of many advanced economies, while some emerging economies are running into bottlenecks.
"A return to healthy and sustainable growth calls for ambitious and comprehensive structural reforms, covering a broad range of policy areas," it said.
In emerging economies, the OECD said policy priorities should include improving access to quality education, addressing physical and legal infrastructure bottlenecks and bringing more workers into formal-sector employment.
India, it said, had set up a cabinet committee focusing on speeding up approval of large infrastructure projects. The panel has cleared 296 projects worth Rs 6.6 lakh crore.
"The reform of land acquisition law reduces uncertainty associated for investors by setting clear compensation guidelines and by lowering the required threshold of consent from people to be displaced," the OECD said.
