Economists highlight that India’s economic progress depends on tackling existing barriers like land acquisition and administrative reforms, shifting focus from large policy overhauls to targeted improvements following Prime Minister Modi’s ‘Sapta Dhara’ initiative.
Economists say India’s next phase of reform will depend less on new grand policy frameworks than on fixing the practical barriers that still slow investment, especially land acquisition, local approvals and a patchy business climate. The point gained urgency after Prime Minister Narendra Modi used his Independence Day speech to sketch out “Sapta Dhara”, or seven streams of strength, as the next stage of his economic push towards a developed India by 2047.
N R Bhanumurthy of the Madras School of Economics said the priority now is a series of smaller, targeted changes rather than another sweeping overhaul. In particular, he argued that land acquisition remains a major constraint because of gaps in land records and uneven administration across states. He said that helps explain why some western and southern states have outperformed much of the north and east in manufacturing.
That argument fits with wider advice from economists that India should look inward to remove long-standing bottlenecks while global uncertainty remains elevated. DK Joshi, chief economist at Crisil, said a more predictable domestic business environment would do more for growth than fresh promises alone. He also said stable foreign direct investment rules would matter more once investors see clearer, more consistent implementation at home, especially after India moved to terminate many bilateral investment treaties in 2016 and FDI inflows slowed sharply in recent years.
The government has already begun some of that work. Finance Minister Nirmala Sitharaman set aside support in the 2024-25 Budget for state-level land reforms, and later reform efforts have focused on a more trust-based compliance regime, digital trade facilitation and lower litigation, according to recent policy summaries. But economists say the real test will be whether states move quickly on land records, planning, by-laws and approvals. Joshi said reforms should continue in GST as well, while Bhanumurthy cautioned that the four labour codes should be allowed to settle before any new labour changes are attempted. Together, they suggest that India’s reform agenda is shifting from new announcements to better execution.
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