India has mastered the art of mass democracy. What it hasn’t yet achieved is mass prosperity. As we approach India@100, the window to act is closing. The pathway is clear: deregulate employers, decentralise economic power, and invest heavily in human capital development. Without these three pillars, India risks squandering its demographic dividend.
Cut the Chains on Employers
When it comes to India’s economic reforms, the most urgent step is deregulation. Indian businesses are weighed down by a dense web of over 60,000 compliances, 6,000 filings, and 25,000 criminal provisions.
Labour laws like the Industrial Disputes Act, which require government approval for layoffs in firms with over 100 workers, make formal hiring risky. This is why many businesses remain “dwarfs” and choose to stay small instead of scaling into high-wage, high-productivity firms.
Self-employment, often framed as entrepreneurial dynamism, is in reality a survival strategy for half of India’s workforce—low-paying and often exploitative. Real wage growth will only come when formal, non-farm, high-productivity enterprises can expand without being strangled by regulation.
Power to the States
Competitive federalism in India is not a political slogan—it’s an economic necessity. The old belief that strong states weaken the nation is outdated. India’s infrastructure, labour markets, and industrial readiness vary too widely for one-size-fits-all policies from Delhi.
Prime Minister Modi’s remark—“29 Chief Ministers matter more than one Prime Minister”—underscores what economist Karl Polanyi knew: labour markets are local. Of India’s 26,134 employer-related legal provisions, 80% could be reformed at the state level, along with 65% of compliances.
A State Employer Compliance Grid, modelled on India’s Digital Public Infrastructure, could streamline every license, permit, and filing into a single online process. The US CHIPS Act showed how state-level agility, backed by central support, attracted semiconductor investments to Texas and Arizona. India’s states can compete the same way—if given the regulatory and fiscal freedom to act.
Build the Human Capital Engine
The future of jobs in India will be decided by the quality—not just the quantity—of its workforce. With 900 million citizens under 35, India is at a demographic crossroads. Our dependency ratio of 46.6%—slightly higher than China’s 44.2% but far below Japan’s 70.1%—signals untapped potential. But this potential is wasted without human capital development. Each year, 12 million people enter the workforce, yet too few have market-ready skills. The mismatch between education and employment is glaring.
Globally, Germany’s dual apprenticeship system and Vietnam’s industry-aligned training programs show how targeted skilling works. In India, degree apprenticeships—structured partnerships between employers, universities, and students—can help bridge the gap. These programs integrate learning with earning, deliver industry-recognised credentials, and adapt to new sectors like manufacturing, green energy, and digital services.
The National Education Policy 2020 identified this pathway, but implementation requires deep industry-academic collaboration and serious investment. Without it, the demographic dividend could become a demographic burden.
The Courage to Break with the Past
By the early 2030s, India is set to become the world’s third-largest economy. Yet our per-capita income still ranks outside the top 100. Closing this gap requires productivity gains from states, firms, and citizens alike.
This is the India@100 growth strategy: free employers from regulatory chokeholds, give states the autonomy to innovate, and build a workforce capable of competing globally. None of these changes will come without breaking old habits, taking on vested interests, and acting with the fierce urgency of now. The clock is ticking. History doesn’t remember those who hesitated—it remembers those who acted. Our ancestors knew this when they said: Veer Bhogya Vasundhara. The brave inherit the earth.
This article is based on the views shared by Manish Sabharwal in The India@100: The Big Ideas, series published by Business Today on 17th August titled: ‘Mass Prosperity from Higher Productivity’
