NEW DELHI – Nowadays, economists are assailed by irresolute thoughts: what, for example, is the right term to apply to current global economic conditions? Is it “depression,” “recession,” or, finally, “recovery”? What of the euro? Will it flounder or regain its “health”?

As these debates fill the air in finance ministries and economics departments around the globe, India continues its steady GDP growth, now projected to reach 9.4% this year. Indeed, the government says that the growth rate will hit double figures soon.

Although many people seem amazed that India has maintained rapid growth for so long – even in the face of the global downturn – surprise is unwarranted. India’s proportion of global GDP stood at 25% in 1750, but slumped to 1.6% in 1900, at the high noon of imperialism. India is simply rising again to reassert its traditional global position.

Can India achieve this?

Many challenges confront India on its path to sustained strong growth, principally that of converting the country’s vast promise into reality. In order to achieve this in a true democracy, India must ensure distributive justice. It must ensure that enhanced purchasing power leads to a markedly improved quality of life for all of India’s citizens.

Currently, India has a window of opportunity, nearly unique in nature, thanks to a huge demographic dividend: almost 60% of the country’s population is below the age of 30. But this advantage is limited in duration, lasting two or perhaps three decades. If it is not used now, it will dissipate.

To seize this opportunity, India first must move decisively away from state capitalism, the remnants of which continue to retard the country’s economic progress. India’s economic future lies in maximizing its private sector’s dynamism, which demands an acceleration of institutional reform, including privatization at both the national and state level.

But, as the Indian economist and frequent policymaker Vijay Kelkar has put it, “India needs to fashion [its] own sui generis model of growth and development…towards an advanced economy, always promoting inclusive growth, and thus gain the benefits of enhanced efficiency, greater equity, and better governance under a liberal democracy.” Simply copying American, British, or other Western policies and institutions will not work.

Moreover, India is not China; it cannot be – indeed, it must not be. That is why it should not hanker after any ersatz export-led or state-directed growth.

India’s second great challenge is to resolve its enormous infrastructure shortcomings. India is no longer primarily an agricultural economy; indeed, agriculture accounts for only around 20% of GDP. But this does not mean that agriculture should be neglected; on the contrary, it remains a way of life for many millions of Indians, who need capital and new technology.

Raising farm productivity and income requires improved irrigation, wasteland reclamation, warehousing, marketing, transport development, and the free movement of produce within the country. This is why rapid strengthening of India’s physical and social infrastructure is central to its progress.

This leads us to examining India’s current fixation with GDP growth as a national panacea. The theory is that the government, as the agent of the people, collects taxes and delivers public goods in return. In this sense, the Indian state has been rather a poor agent; it collects little and delivers a pittance – and what it does deliver is of grossly inadequate quality.

Yet the Indian state continues to ask for a disproportionately high price from the people. This must change, by directly targeting the alleviation of poverty – and ultimately its elimination. I accept that the most powerful anti-poverty program is economic growth, but it works only if and when it is accompanied by distributive justice.

Only such “just” growth can eventually be converted into high GNC: “Gross National Contentment,” a truer index of economic well-being. Rather than endless debates about higher budgetary allocations, India needs to find practical ways to promote effective, targeted, self-adjusting, and self-liquidating anti-poverty programs.

It is not the amount of money allocated by government that matters. The true litmus test of budget expenditures is what actually gets delivered. Only an inclusive approach to reform can meet peoples’ expectations, and in turn spread contentment.

India does not need more laws. It needs more effective and more accountable governments. It does not need more regulations, but rather a vastly larger canvas for individual freedom and opportunity. India’s economy must be freed from the organizing principle of state control, so that individual enterprise and creativity can become its main engine.

India is at the threshold of an era of unprecedented growth. But to cross it, Indians must craft a new idea of India – as the flagship of a modern global economy that unleashes the dynamism of all citizens.