Edited by Kirit S Parikh of the Indira Gandhi Institute of Development Research (IGIDR), the IDR has stated that some of the other aims of the second generation reforms should be to let the creativity of our people flourish to acquire a technological pre-eminence in selected areas and to encourage them to exploit to the full opportunities provided by a global world of knowledge industries.

Stressing on the need of development of knowledge-based industries the IDR has stated that some of the inputs which will help in exploiting it are telecom facilities at international prices, thriving institutions of higher education, an open and democratic society which is hospitable to innovation, protection for intellectual property rights (IPR), and a financial sector that can fund high risk projects.

The report hasurged for the need for an exit policy, which is critical if Indian firms are to become transnational companies. It has also favoured labour law reforms, freer trade both domestic and international, and first rate financial markets that permit risk hedging and provide capital at competitive rates.

The IDR has stated that the first and foremost area for progress towards a knowledge-based economy is telecommunications. Stating that integration into the world economy, and export of services, hinges on low price and high quality telecom services being available; the IDR has said that India's telecom sector has failed in producing these services. It has noted that some telecom services in India cost 10 to 100 times more than comparable services abroad.

On the need for promoting venture capital, the IDR has said that the traditional culture of banks and bank-like institutions in India is oriented towards capital-intensive industrial projects and they are ill equipped to take risks in knowledge-intensiveprojects. It has stated that new methods of operation in the financial sector, such as venture capital and private equity funds, are better suited to the risky projects of the knowledge-based economy. The IDR has noted that if Indian firms are to compete with global TNCs, they have to be flexible in entry and in exit. They must be able to start new activities and also to close down unsuccessful ones. They need the freedom to redeploy resources and exit from unprofitable activities. This requires amending the Industrial Relations Act. The report has said that the inability to retrench workers reduces efficiency by reducing the motivation of workers, this also slows down the process of re-allocation of resources in the economy. However, it has cautioned that workers should be protected against arbitrary retrenchment and the law should establish a due process for the retrenchment of staff.

With regard to trade reforms, the IDR has stated that it is essential to directing resources in India to their mostproductive uses. Tariff levels should be brought down to internationally comparable levels.