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India today occupies the centre stage in the global arena, and economists the world-over are bullish on india`s unprecedented economic growth in the last ten years and it growth prospects for the future. The large pool of human capital-a young, talented and well-educated workforce-is one of the major drivers of economic growth in the country. Rapid strides in knowledge-based industries, especially information technology, rejuvenation of the manufacturing sector, revolution in the agricultural sector and resurgence in exports have made India one of the fastest growing economies in the world. Th

The second-generation reforms in India are ones where the focus shifts to a large extent from the Centre to the States. All big infrastructural areas and important subjects like land, labour and agriculture are state issues, just as health and education are. It is important indeed to highlight that in the reform process in India, the main protagonist has been the Central Government. However, going forward, apart from issues related to competition, foreign direct investment and the broad functioning of the legal system, almost all other issues that this article discusses fall squarely on the shoulders of state governments. Building constituencies for reform in states, with entrenched interest groups and smaller constituencies, is certainly going to be more difficult than it has been to push for reform at the centre. However, if inclusive growth is important, rural development critical and agriculture growth crucial, it stands to reason that the unfinished business of India's reforms must be carried on at state capitals. The process seems to have begun, as states compete increasingly for investments and not any longer for central subsidies and grants.