Organization for Economic Cooperation and Development (OECD), in its report titled 'Going for Growth' has stressed upon the need for India of easing administrative and regulatory 'burden' on companies and encouraging infrastructure development, in order to promote economic growth.
The Paris-based think tank though acknowledged the reduced FDI barriers by India in various sector, but highlighted that more efforts were required for efficient allocation of capital. According to OECD, the FDI barriers have been reduced in particular in telecom, civil aviation, railways, defence, construction and multi-brand retail.
It pointed to various steps taken by Reserve Bank of India (RBI) to increase competition and efficiency in the banking sector, like those of issuance of new banking licenses in 2014, allowing banks for opening branches without prior permission and Foreign banks for opening subsidiaries and branches across the country, subject to domestic regulation, but insisted upon the need for further reforms in the sector to achieve efficient allocation of capital.
Further, OECD underscored that the country to spur creation of formal jobs should reduce the labour market duality, simplify labour laws and reconsider the rather stringent employment protection legislation. It suggested ambitious reform agenda to help boost jobs, productivity and support demand. Nevertheless, it also pointed to difficulties that the government would face in pushing these reforms meant to bolster growth in the context of weak demand, limited budgetary leeway and high unemployment. At the similar point, OECD in its report termed structural reforms along with effective fiscal and monetary policy as an essential trilogy for boosting growth.