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India From Emerging to Surging

The McKinsey Quarterly: India—From emerging to surging

In a decade, the country could more than double its gross domestic product per capita—but only if its government and people act quickly and decisively.

Our study found three main barriers to faster growth: the multiplicity of regulations governing product markets, distortions in the market for land, and widespread government ownership of businesses . We calculate that these three barriers together inhibit GDP growth by more than 4 percent a year. Removing them would free India’s economy to grow as fast as China’s, at 10 percent a year. Some 75 million new jobs would be created outside agriculture—enough not only to absorb the rapidly growing workforce but also to reabsorb the majority of workers displaced by productivity improvements.