India may be the most important unheralded story of the world economy in coming years. Although India's one billion people constitute one-sixth of humanity, and notwithstanding the fact that India is the world's largest democracy, India remains off the radar screen for most observers of the world economy. This may change soon, for India is on the move.

If it remains on course with economic reforms, India will be one of the world's fastest-growing economies in the next few years, and will become a premier location for foreign investment. India's global political influence is likely to rise in conjunction with economic success, benefiting both the cause of democracy as well as the global economy.

India's low profile is easy to understand. Upon independence half a century ago, India's first prime minister, Jawaharlal Nehru, set India on a course of protectionism and socialism - two of the most self-defeating economic strategies of modern times. To a country that had struggled for decades against British imperialism, however, neither capitalism nor openness to foreign investors seemed a prudent course. While India made important advances in science, agricultural technology, and democratic institutions the economy remained below its potential for decades.

Only when India chose a course of market reforms in the mid-1980s did the outlook improve. With a decisive turn towards open trade and market liberalisation in 1991, India finally broke free of the shackles of a failed economic strategy.

During the 1990s, India found its footing as a market economy integrating with the world. Because of its poverty, its complexity and its vastness, the uptake of market reforms has been gradual, but also remarkably resilient to shocks.

The old centralised political structure built around Nehru's Congress Party collapsed in the mid-1990s, giving way to a succession of weak multi-party governments. But the remarkable underlying truth is that each new government endorsed the direction of globalisation and market reforms. The current government won a strong mandate in last autumn's elections, giving it several years to deepen and widen reform. With this political mandate, India stands the chance of a dramatic breakthrough to rapid growth. Several things are now working in India's direction:

Rapid population growth is finally slowing and a growing proportion of the population will now be of working age.

Old social barriers to education for girls and lower castes are giving way, under democratic pressures, to strong calls for universal education.

Decades of investment in science and technology are now paying off in creating a powerful technological base for a modern Indian economy.

As China boomed in the 1980s, India could boom in the first decade of this new century. If the national consensus around reforms is sustained and enlarged, two great goals could be met. India could enjoy a decade of "income doubling", in which per capita gross domestic product actually doubles by the year 2010. Second, India could create a system of universal literacy and education for the first time in its history. These goals require hard work on the part of government and society. Most importantly, all major political groups have to get behind the concept of universal education. Next, the government must lead a massive effort of reform. For example, despite nationalist rhetoric by state enterprises and associated trade unions, the government should decide that the vast telecommunications network should be privatised. It's only in this way that India can hope to create a network of fibre optics and telephone lines to catapult the country into a modern information economy.

Several other areas of reform in finance, labour markets, foreign investment, tax reform await action. Another goal should be to increase the government's spending on research and development, especially in areas of health, agriculture, environment and information technology.

Despite long-standing political obstacles to some of these reforms, this may be the best and most likely moment for a political breakthrough.

We should pay rapt attention as the new Government unveils its new budget and new development policies in coming weeks. It may contain positive news for India, and for the world.

Jeffrey D. Sachs is Galen L. Stone professor of economics, and director of the Centre for International Development, Harvard University. Copyright: Project Syndicate,