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Essay competition: Why does India mean business?

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(CNN) -- Business students and budding young entrepreneurs took part in our competition to tell us just why India means business.

From hundreds of entries we've published the winning essay and the four runners-up, below.

Winner: Anuj Jalote, student at India Institute of Technology, Delhi

"The new millennium has seen the Indian economy surge ahead breaking all previous barriers. The industrial and service sectors have contributed a major part of this growth, suggesting the structural transformation underway in the Indian economy. India is among the world's youngest nations with a median age of 25 years as compared to 43 in Japan and 36 in USA.

"According to the World Fact Book, of the BRIC -- Brazil, Russia, India and China-- countries, India is projected to stay the youngest with its working-age population estimated to rise to 70 per cent of the total demographic by 2030 -- the largest in the world.

"The economy is vibrant -- India's foreign exchange reserves stood at a healthy $ 300 billion as of August 08, 2008. The foreign institutional investors (FIIs) brought in $16.1 billion in 2007-08. Foreign direct investment (FDI) inflows during 2007-08 rose 56.5 percent to US$ 24.57 billion.

"The number of companies incorporated has increased at an annual average of 55,000 companies in the last two years to 865,000, from 712,000 companies at the end of 2005. (IBEF Report)

"However, all the progress made by the country is obscured by the core problems that plaques the nation. The following are the 10 core problems facing India: Poor educational standards; poor infrastructure; balance of payments deterioration; high levels of debt; unemployment; economic inequality, large budget deficit, high inflation and rigid labor laws; high subsidies.

"These problems stunt growth and restrict India to being only a developing economy. Reform of inappropriate policies, unproductive government programs and inefficient public organizations and projects can generate hope and confidence in a more productive future.

"I strongly believe that the key to solving the critical problems that are faced by the nation lies in the integration of the efforts of the different states and the center.

"The states of the Indian federation should share the responsibility of fiscal consolidation and prudence in a federal polity. State finances need to be strengthened, for both macroeconomic and structural reasons.

"A shuffle in the revenue expenditure by states can decrease the revenue deficit while leaving sufficient funds for developmental expenditures, especially for the key area of human resource development. Inadequate infrastructure (irrigation, electricity, roads etc) and human capital formation (expenditures on education, basic health etc) where states shoulder major responsibilities have large costs not only to the states concerned but beyond their borders.

"Improving the center-state financial relations and working towards economic integration would go a long way in nation building, socio-economic development.

"For this we can take learning from integration models followed in USA (between states) and European Union (between countries) and thus target inclusive economic growth in our nation.

"The taxation and subsidy regimes of states and center should be in consonance for creating an encouraging and exciting business environment such that the benefits accruing from the reforms of central policies are maximized."

Click here to read the entries from the 4 runners-up

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