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Rotten Economic News Continues to Stream Out of India

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.

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  • Mexipat

    Work hard, excel at what you do, live within your means. Individuals, groups, and countries who attempt to circumvent these basic maxims will, sooner or later, fail. Oh, and there’s no free lunch. Not very original or profound I know, but apparently easily forgotten or ignored – especially by “elites” who never internalized them from personal experience.

  • EvilBuzzard

    The US of A had similar hiccups along the way to industrialization.

  • Ben Samuels

    “An paralyzed and ineffectual government”

    I can haz proofreader?

  • I recall India as a loyal ally of the Soviet Union, so this is no surprise.

  • Adjoran

    Unfortunately, this was inevitable. The Indian economy is hamstrung by its corrupt bureaucratic system, the Raj. It takes years to get permission to expand a factory, sometimes even to buy new equipment.

    It’s the sort of regulatory nightmare Obama is presently trying to construct for us.

  • pashley1411

    Just another place where the elites are fighting progressive, and could use a revolution. We could as well.

  • bhollis

    Reading Katherine Boo’s recent book about a Mumbai slum, the most striking thing isn’t the poverty and misery (though there’s plenty of that), it’s the corruption. It exists at every level of Indian society and it’s so deeply ingrained that it could take many generations to escape.

  • Krishna

    Poor donk does not know that the Soviet Union does not exist anymore.

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