The Survey says that the time has come to benchmark the reforms process with those of other countries. For example, controls on export production--comprehensive re-examination of labour laws and SSI reservation for exporters--should be at par with successful exporting countries like China. Similarly, interactions between exporters and organs of the state, such as customs, exchange control, tax authorities and licensing authorities (like the DGFT) must match those existing in East Asian countries.

The Survey says that policy makers' fascination with the exchange rate as the sole arbiter of our external sector must go. "We have to go beyond such macroeconomic variables to addressthe more long-standing and intractable structural disadvantages faced by our exporters (relative to those of exporters in China, Malaysia and Thailand)," the Survey goes on to add.

The second generation of reforms will aim to remove what are now called the "last-mile" barriers. "The gargantuan task of decontrol and debureaucratisation remains unfinished", the Survey observes. The remaining price and distribution controls must be eliminated. Reservation for SSIs must go as should investment controls in several infrastructure and service sectors. Similarly, though quite a few financial sector controls stand removed, many remain embedded in the laws, rules, regulations, norms and procedures.

The Survey makes it clear that states must also adhere to the reforms agenda. Social sectors, agriculture and rural development are state subjects. Decontrol and delicensing with respect to transport, storage and processing of agricultural goods, and reform of infrastructure sectors like electricity, canals and roadtransport are a prerequisite.

A new tripartite effort to provide a quantum leap to reforms is mooted. The Survey is of the view that "institutional reforms such as those related to size and quality of governance, freedom of information, economic laws and the legal system require the involvement of central and state governments as well as the judiciary". The modalities of this process have not been spelt out.

The Survey has called for a quantum change in the way public services are priced. Targeting subsidies at the very poor is, of course, a must. But what is of interest is the suggestion that the rest pay at least the operational cost of public services. This means that sweeping reforms are likely in the pricing of services like health, higher education, sanitation and water supply.

The Survey admits, for the first time, that revenue streams of most infrastructural projects are incapable of supporting exchange risk. Therefore, private financing of such projects would require a major domestic focus.Candid admission indeed. What is more, NBFCs are back in favour as is evident from the observation that "since timely availability of credit is as important as cost, financial intermediation by NBFCs is of importance". If banks and institutions have failed to rise to the occasion, equipment/leasing/hire purchase and loan/investment companies can bridge the gap.

Indeed, second generation thinking has to go hand-in-hand with second generation reforms.