What you point out — that consumer subsidies tilt the playing field — is well and good but that is not what I was referring to. I was just saying that R&D has to be subsidized. There’s a distinction.

Regarding your point #3, you ask “Why dismantle the government education system?”

Quite right. One does not have to dismantle the government education system. However, India is a poor country. Can it afford to waste resources on a system that has never performed and is unlikely to perform ever? The opportunity cost of the public spending is immense.

Only the rich can afford to do things wastefully. But if one thinks about it, a rich person is someone who was not wasteful in the past, while a poor person is someone who wastes resources.

2. Funding for R&D in the energy sector. [...] tax incentives for firms to invest in renewable energy.
I am not a student of economics, but energy systems is my research interest. I have come to believe that tax incentives or subsidies tilt the playing field in favour of certain technologies for reasons other than purely technical and economic. The latter are really the way to guide us to the right technology.

Several tech companies in Bay Area went solar to meet some of their energy needs. This comes at a high capital cost, which are anyway accounted for while computing taxes owed. The operation costs are much lower. Why would one need additional tax incentives?

How are tax incentives significantly different than the plan for subsidising corn-based ethanol (which, I think, is a disastrous idea).

3. Dismantle the government education system and liberalize the sector.
Why dismantle government education system? Liberalise education sector: sure. Let government system compete on their merits with private operators. UCB is a public university, isn’t it?

It should be mentioned that unlike the west, private Indian universities tend to be for-profit enterprises. While a lot of us like to point to the fact that UCB is the only public university in top five and that there are equal number of public and private universities in the top-ranked US research universities, what we fail to note is none of these universities are for-profit enterprises and that a majority of research funding still comes from tax payers money.

4. Create an independent authority that will create a private-sector long-distance transportation network based on steel-wheels on steel-rails.
Most of the successful railway networks in the world are public. You don’t intend Indian Railways (with all its faults) to go the way of Amtrak, do you?

5. Last and not the least: fix the legal system.
This should be point #1 in your list.

http://chanakya2006.blogspot.com/2007/09/prime-ministers-independence-day.html
http://chanakya2006.blogspot.com/2007/08/prime-ministers-independence-day_24.html
http://chanakya2006.blogspot.com/2007/08/prime-ministers-independence-day.html

Again, i would like to refer to the book: “Confessions of an Economic Hit Man” by John Perkins. He has mentioend in couple of chapter how he used to project about growth and since there is no other rationale to oppose it, soon it becomes the de facto truth.