There are many future challenges that India will need to address in order for it to be a more prosperous country. Government corruption, the population explosion, the issue of Kashmir and other potentially vigorous separatist movements, relations with Pakistan, nuclear arms, the growing gap between the rich and poor, and last but not least, ecological devastation are among the issues that the Indian government will need to address seriously.
The government sector in India is known to be among the most bloated and overstaffed in the world. Furthermore, nearly all transactions with government agencies, from acquiring one's passport to obtaining a birth certificate, often require some amount of bribe. Stealing and skimming services, such as electricity, is common. In New Delhi, for example, as much as 51 percent of electricity is "lost" in transmission, much of it stolen by relatively prosperous urban households. Increasing efforts by the government to minimize waste, corruption, and grand and petty theft would be beneficial.
Population growth will likely not subside for several more decades. The high rate of growth of the population has negative effects on the well-being of people. The number of Indians consuming diets with fewer than 1,900 kilocalories (kcal) per day, for example, has quadrupled since the early 1970s. (Many nutritionists assert that a diet of at least 2,600 kcal per day is necessary to maintain body weight.) During the same period, total food grain production in India has doubled. High rates of fertility are thought to be indirectly proportional to economic well-being of households, as well as the level of education of parents—especially mothers. In essence, the more prosperous a household and the more educated the mothers, the fewer children couples have.
The success of government education and public health programs, however, depends not only on more spending but also on improving the quality of services. There is a need to phase out a number of anti-poverty programs and direct some of the savings to ensure quality education, which is more effective in reducing poverty over the long-term. For the poor to take advantage of the new educational opportunities, however, their health status needs to improve. Targeting government spending to primary education, reducing communicable diseases, improving water and sanitation, and reducing household insecurity through public works programs would do much to reduce poverty. The government should invest in health care and education, especially for children in grades 1 though 8. According to the United Nations, current spending on education takes up about 13.4 percent of the central and local government budget as compared to an average of 17.5 percent for all low-income countries. Without substantial increases in spending on education and health care, the gap between the rich and poor is likely to remain and intensify.
Improving relations with neighboring Pakistan is also a determinant of improvement of people's lives in India. Much of the dispute between the 2 countries is over Kashmir. Both India and Pakistan claim ownership to the entire Kashmir region. India is thought to have stationed nearly half a million troops in the state of Jammu-Kashmir along the Pakistani border. According to human rights reports, as many as 60,000 people have died in Jammu-Kashmir due to fighting between Indian troops and Kashmiri nationalists. Relations with Pakistan could also improve if a pipeline agreement that envisions pumping natural gas from Iran to India through Pakistan goes through. The proposed deal would allow India to increase its consumption of natural gas to as much as 85 billion cubic meters (3 trillion cubic feet) by 2020 and for Pakistan to collect up to US$600 million of transit fees. However, the 2001 attack on the Indian parliament by Kashmir separatists based in Pakistan placed the pipeline and future relations with Pakistan in serious jeopardy.