The report, brought out by Jim O'Neill, head global research at Goldman Sachs, and Tushar Poddar, vice president, research, Asia Economic Research Team, Goldman Sachs India, outlines 10 crucial steps that India must take in order to achieve its full potential.

If India can undertake the necessary reforms, it can raise its growth potential by as much as 2.8 per cent per annum, says the report.

Without better governance, delivery systems and effective implementation, India will find it difficult to educate its citizens, build its infrastructure, increase agricultural productivity and ensure that the fruits of economic growth are well established.

2. Raise educational achievement

Among more micro factors, raising India's educational achievement is a major requirement to help achieve the nation's potential. According to our basic indicators, a vast number of India's young people receive no (or only the most basic) education. A major effort to boost basic education is needed. A number of initiatives, such as a continued expansion of Pratham and the introduction of Teach First, for example, should be pursued.

3. Increase quality and quantity of universities

At the other end of the spectrum, India should also have a more defined plan to raise the number and the quality of top universities.

4. Control inflation

Although India has not suffered particularly from dramatic inflation, it is currently experiencing a rise in inflation similar to that seen in a number of emerging economies. Thea authors of the report think that a formal adoption of inflation targetting would be a very sensible move to help India persuade its huge population of the (permanent) benefits of price stability.

5. Introduce a credible fiscal policy

6. Liberalise financial markets

To improve further the macro variables within the GES framework, the report believes that further liberalisation of Indian financial markets is necessary.

7. Increase trade with neighbours

In terms of international trade, India continues to be much less 'open' than many of its other large emerging nation colleagues, especially China. Given the significant number of nations with large populations on its borders, the Goldman Sachs report recommends that India target a major increase in trade with China, Pakistan and Bangladesh.

8. Increase agricultural productivity

9. Improve infrastructure

Focus on infrastructure in India is legendary, and tales of woe abound. Improvements are taking place, as any foreign business visitor will be aware, but the need for more is paramount. Without such improvement, development will be limited.

10. Improve environmental quality

The final area where greater reforms are needed is the environment. Achieving greater energy efficiencies and boosting the cleanliness of energy and water usage would increase the likelihood of a sustainable stronger growth path for India.