The New York Times.
NEW DELHI — India’s
coalition government just celebrated the third anniversary of its
tenure with a self-congratulatory banquet that could not have been more
poorly timed: India’s currency, the rupee, is falling; investment is
down; inflation is rising; and deficits are eating away at government
coffers. While short-term growth has slowed but not ground to a
halt, India’s problems have dampened hopes that it, along with China and
other non-Western economies, might help revive the global economy, as
happened after the 2008 financial crisis. Instead, India is now facing a
political reckoning, as the country’s elected leaders must address
difficult, politically unpopular decisions — or risk even deeper
problems.
“When India was being run comparatively well in 2008, they seemed to
cope with these external shocks, at least from a financial perspective,”
said Glenn Levine, a senior economist at Moody’s Analytics in Sydney,
Australia. “I think people are starting to question the long-term Indian
story. That is the difference now.”
India’s difficulties come as the global economy is wobbling once again. Europe is grappling with a sovereign debt crisis
that could shatter the continent’s economic and political union. The
United States is still not producing enough new jobs. China’s growth has
weakened, with a real estate downturn and stalling exports, while
important emerging economies like Brazil are slowing down, adding to
pessimism about the world economy at a critical time.
