Recently India has surpassed France and has become sixth largest economy in world in terms of nominal GDP. Considering the current growth rate of economy of India and considering the existing gap between GDP of India and UK, it is quite likely that in a year or so India will take over fifth position in world economy surpassing UK. Now the global economy is moving towards knowledge based economy rather than asset based economy. Knowledge base and its application needs to be increased more in agriculture sector to improve the productivity. Government should invest adequate amount of money in research and development (R&D) in agriculture and distributing the knowldge created through R&D to doorsteps of farmers. However, in industry sector, focus should be on productivity, quality, cost reduction and venturing into new high tech area of manufacturing and product diversification where India is importer such as manufacturing of advance electronic components and sub-systems, advance metals and materials. This requires two pronged approach: one acquiring best possible advanced technologies availaible across the globe even if it is a bit costlier and other pumpimg about 3 percent of output of the particular sector in R&D. Companies can be given some benefit in tax for money spent in R&D. Service sector is of course doing well, but still scope exists in tourism and health sector. Taking these steps will definitely further improve Indian economy.