Let's praise India for its recent economic achievements. By now, they are familiar: the growth of a world-class IT sector, the development of a competitive automotive industry, and a burgeoning middle class.

But the time for self-congratulation is over. Increasingly, India knows it must get on with the job of sharing the country's newfound wealth with the vast majority of its people, who so far have little to show for the economic growth that followed the liberalization of 1991. The rise of the IT and biotechnology sectors is a great success story, but they alone aren't enough to create the kinds of employment opportunities that will bring broader economic and social progress. What's holding India back? For one thing, the poor state of public health, including big gaps in the provision of clean water and modern sanitary facilities, the immunization of the population, and the control of infectious disease. Then there's the troubled infrastructure, a problem brought home recently by the terrible flooding in Mumbai. Although thousands of kilometers of highways have been built, India is still years behind in modernizing ports and airports. In basic education the illiteracy problem is huge, and in higher education an inability to meet the growing demand for engineers, chemists, and IT specialists endangers India's current advantage.

The government can and should do a great deal in these areas. As Prime Minister Manmohan Singh says in an interview published in this special edition of The McKinsey Quarterly, "The first and foremost priority is to finish the unfinished task which the founding fathers of our republic set out for us at the time of our independence: to get rid of chronic poverty, ignorance, and disease, which have afflicted millions and millions of our people." Of course, that costs money, and India doesn't have unlimited means. The government could make way for private capital—just look at the interest India is generating among private equity firms. Too often, however, restrictive policies and red tape make it too difficult to invest.

Reflect on what India has achieved in mobile telecommunications—up to two million new subscribers a month, paying the world's lowest prices—by applying appropriate levels of regulation. Letting foreign retailers invest in the country would be a fine way to create jobs, but so far that hasn't been possible. In "Why believe in India," Ranjit V. Pandit credits the government with many achievements but asserts that it must find the resolve to deregulate industries such as retailing, banking, the news media, and defense.

Similarly, Raghuram G. Rajan, the International Monetary Fund's chief economist, notes in "Making India a global hub" that the economy isn't as open to foreign goods and services, labor, or knowledge as it should be. That could keep India from becoming more of a player in the global economy. "Reforming India's financial system," an article from the McKinsey Global Institute, argues that continued strong growth depends partly on regulatory changes to permit more foreign direct investment in banking.

India took the lead in the offshoring of IT services—see "Ensuring India's offshoring future" and "An upgrade for India's IT services industry"—but lags behind in manufacturing. The country should be a superb location for it, but many foreign companies think that low labor costs aren't enough to offset a poor infrastructure and thorny government regulations. "When to make India a manufacturing base" shows how some multinationals have nonetheless succeeded.

Manufacturing should play a big role in rural India's economic development. Many of the millions dependent on subsistence farming must have a chance to get higher-value-added jobs in agribusinesses such as food processing. Unplanned migration to overcrowded cities will continue unless the country improves the lot of the 70 percent of the population living in villages.

There's much talk in India about the knowledge worker and the knowledge economy. Yet they are sideshows to getting the basics right. India needs more jobs in sectors such as manufacturing, construction, and agribusiness, where it isn't necessary to be a knowledge worker to make a living. Only then can the country fulfill its promise.