Adding to the “new normal” of global economic gloom, India’s growth has slowed to its most tepid pace in three years, according to Reuters. High interest rates, rising inflation, and a manufacturing sector hampered by expensive inputs and high borrowing costs mean that India is doing worse than other Asian economies, which are themselves slowing down amid global deleveraging and structural shifts.
Many both inside and outside India are pointing an accusatory finger at the weakness of economic reforms and the general policy paralysis that seems to have besieged Delhi in recent months. Corruption scandals have hampered Prime Minister Singh’s economic policy, and reform has stalled in the coalition government
The enormous plurality of interests in India makes it difficult to pass reforms that satisfy everyone. Many voters view economic reforms that boost growth as abstract concepts; they prefer greater inclusion for the masses and more local anti-corruption laws. An paralyzed and ineffectual government can achieve neither of those things.
This latest data is not comforting for the Congress Party ahead of India’s national elections in 2014.