New Delhi, Jan. 27 -- India's economic challenge today is to sustain a growth of 8-9% over the next two decades to achieve its vision of a Viksit Bharat by 2047. The upcoming Union Budget must focus on reforms that raise India's long-term growth potential.

First, efforts should be made to lower the cost of capital. India's private credit-to-GDP ratio remains low for an economy of its size and ambition. Banks are mandated to keep a significant share of deposits in government securities. A calibrated, phased reduction in the statutory liquidity ratio will create substantial lending capacity, thereby cutting borrowing costs and improving competitiveness. Equally important is addressing the "missing middle" in enterprise growth. While India ...