• Fourth, the introduction makes the valuable point that ‘‘the private sector, including farming, small scale enterprises, and the corporate sector’’ would need to play an even more important role. But there is no discussion of what might be the comparative advantages of the public vs private sectors, or what might be the complementarities or, most importantly, what might be the most effective way to use public resources to leverage private resources.

As part of this framework, we also need to be realistic in our expectations of what the private sector will and will not do. For example, the private sector can be relied upon to finance some infrastructure, but the political risk premium for projects located in some lawless areas may just be too high for private companies and these might be areas to which public resources would need to be directed. There are other areas where we need to be more explicit in our recommendations, like:

A clearer enunciation of policies to attract direct foreign investment, for instance merely to say that foreign investors have shown strong interest in playing a larger role in multi-branded retail stores is not enough. Removal of sector caps, particularly in insurance, banking and some others, enabling legislation in key areas like coal and mines, remains critical. Engaging states for greater diversification, including market linkage supported by modern marketing process, and abolition of the Agriculture Produce Marketing Act needs proactive action. Similarly, merely to say that to retain competitive advantage we need greater flexibility in labour laws is not enough. Can we at least recommend that the flexibility should be available prospectively on that it would not apply to SPVs or to empower the states to devise policy configurations best suited to their needs?

... contd.