Some analysts warned the new government could disappoint investors - not least because of unrealistic expectations and more opposition than immediately apparent to market liberalisation. As the FT notes, the “bulk of the Congress party’s electoral support did not come from people seeking reform”.
All the while, India is suffering from the global downturn. Economic growth rates have fallen from 9 per cent to nearer 5 per cent this year, some estimates show.
Four Warnings from Gideon Rachman, Financial Times (ft.com)
(First) While Mr (Manmohan) Singh is an impeccable frontman, the country’s politics has a much sleazier and more disreputable side.
(Second) Just because India is a democracy, it does not follow that it will automatically side with fellow-democracies around the world. The sleazy side of Indian democracy has led to a third common notion — popular in the authoritarian parts of Asia: the idea that democracy imposes a sort of tax on India.
(Third) But it is still true that, for all the virtues of its political system, Indian governance has failed hundreds of millions of people. Rates of poverty and illiteracy are much higher in democratic India than in authoritarian China.
(Fourth) Euphoria about modern India has led to a fourth mistaken idea: the notion that democracy has given the country a deep and unshakable stability. It is certainly true that the political future of China looks more uncertain and alarming than that of India, Asia’s other great subcontinental nation. But India still faces serious threats to its internal stability.