As India prepares herself for becoming an economic superpower, it must expedite socio-economic reforms and take steps for overcoming institutional and infrastructure bottlenecks inherent in the system. Availability of both physical and social infrastructure is central to sustainable economic growth.

Since independence, Indian Economy has thrived hard for improving its pace of development. Notably, in the past few years the cities in India have undergone tremendous infrastructure up-gradation but the situation is not similar in most part of rural India. Similarly in the realm of health, education and other human development indicators, India's performance has been far from satisfactory level, showing a wide range of regional inequalities with urban areas getting most of the benefits. In order to attain the status that currently only a few countries in the world enjoy and to provide a more egalitarian society to its mounting population, appropriate measures need to be taken. Currently Indian economy is facing these challenges:

	Sustaining the growth momentum and achieving an annual average growth of 7-8 % in the next five years.
	Simplifying procedures and relaxing entry barriers for business activities.
	Checking the growth of population; India is the second highest populated country in the world after China. However in terms of density, India exceeds China as India's land area is almost half of China's total land. Due to a high population growth, GNI per capita remains very low. It was only $ 2880 in 2003 (world bank figures).
	Boosting agricultural growth through diversification and development of agro processing.
	Expanding industry at a faster pace, by at least 10% per year to integrate not only the surplus labour in agriculture but also the unprecedented number of women and teenagers joining the labour force every year.
	Developing world-class infrastructure for sustaining growth in all the sectors of the economy.
	Allowing foreign investment in more areas.
	Effecting fiscal consolidation and eliminating the revenue deficit through revenue enhancement and expenditure management.
	Empowering the population through universal education and health care. India needs to improve its HDI rank, as at 127 it is way below many other developing countries' performance. The UPA government is committed to furthering economic reforms and developing basic infrastructure to improve living standard of the rural poor and boost economic performance. Government has reduced its controls on foreign trade and investment in some areas and has indicated more liberalization in civil aviation, telecom and insurance sector in the future.