India must continue with wide-ranging economic reforms if it wants to achieve Gross Domestic Product (GDP) growth rate of 10 per cent on sustainable basis, says a survey by Organisation for Economic Cooperation & Development (OECD).

“The (Indian) government’s target of reaching GDP growth rate of 10 per cent in 2011 is achievable if reforms continue,” OECD— economic think tank of 30 rich countries—said in its Economic Survey on India. “In addition, if relatively restrictive states improve their regulatory framework towards that of better-run states, growth will be more inclusive and income gas across states will narrow,” it added.

Growth dividends
The survey hoped that impressive response of Indian economy to past reforms should give policy makers confidence that further liberalisation will deliver additional growth dividends. 
The Organisation for Economic Cooperation & Development identified labour reforms, infrastructure, full operationalisation of competition commission and modern bankruptcy law as major challenges to sustain the growth rate.

Productivity jobs
To accelerate its GDP growth rate, the survey said labour market reforms was essential to achieve broader-based development and provide sufficient and higher productivity jobs for growing labour force. Further, it observed, that the government should continue its programme of increased discipline in public spending, adding, they should be better targeted to help the poor.

The survey also recommended reducing tax exemptions to allow more money to be transferred to fund public services in urban areas. 

On foreign direct investment into retail sector, the survey called for the removal of ban on foreign direct investment in retail shops as it would reduce high rate of waste of farm products and lower prices for consumer.