India, July 29 -- For more than three decades, India's economic reform debate has revolved around a familiar belief: the government is too large, the bureaucracy is bloated, and the public sector is a burden on taxpayers. The prescription has therefore been equally familiar - privatise, downsize and outsource. The evidence, however, tells a remarkably different story. Far from being overstaffed, India has one of the smallest public sectors in the world relative to the size of its workforce. The real challenge is not an oversized state but an understaffed one that pays a relatively small number of employees exceptionally well, leaving too little fiscal space to recruit the teachers, nurses, police officers, judges and technical specialists...