ABSTRACT
India’s economy will become more prosperous and more diverse in the coming years. Economic liberalization during the last decade has progressed in tandem with a loosening of the once tightly centralized political system, setting the stage for bigger gaps in economic performance between different regions of the country and between different sectors of the economy. The extent to which India benefits from more internal competition in markets, ideas, and the policies of its various levels of government will depend on the flexibility of its institutions and on the quality of its political and economic leadership. Failure to manage growing economic divergence and regional differences could place great strain on the country’s democratic institutions. India’s more than one billion people are becoming more aware that they are behind other countries in progress and development, and thus more impatient for change.
