This paper examines whether any of India’s high-productivity, high-income growth in the services sector is occurring in rural India, and if so, to what extent. It addresses three questions: (a) While India has experienced high economic growth led by the services sector over the last decade, to what extent has rural structural transformation taken place? (b) How has the Indian services sector performed in the context of the General Agreement on Trade in Services and how is this reflected in rural India? (c) To what extent has the rural workforce gained from the IT revolution?

The Government of India’s 15-year old Accelerated Irrigation Benefits Programme has come under much-deserved criticism for all-round non-performance.

The design of public cash transfers involves a careful balancing of policy priorities and objectives. Variations in the rationale for a conditional cash transfer shape benefit amounts, coverage, duration of programme participation, targeting practices and the definition of conditionality.

The current perception that cash transfers can replace public provision of basic goods and services and become a catch-all solution for poverty reduction is false. Where cash transfers have helped to reduce poverty, they have added to public provision, not replaced it.

This paper attempts to review the recent performance of the economy and lists the priorities and challenges for the Twelfth Plan. The Indian economy will enter the Twelfth Plan period in an environment of great promise, but the next five years will also be a period of major challenges.