Over at Foreign Affairs, Arvind Subramanian and Josh Felman take us through India's tortuous history of reforms. It is a far-ranging piece that give a bird's eye view of India's reforms. The article points to the last decade as a lost decade, and identifies several factors that could lead Indians to turn against market-oriented reforms. One is the protectionist stance that the Modi government has recently adopted (import tariffs are rising steeply in India), and another is the state's explicit support of two big industrial conglomerates (the 2As - Ambani' Reliance Industry and Adani's Adani Group).
India's growth rate since 1991 has closely tracked the intensity of the reforms pursued by its government. There are still many areas for improvements - labor markets, agricultural markets, retail, and many aspects of foreign trade and investment policies are all ripe for some reforms. Many of these initiatives are stalled, slowing down India's progress toward modernity. Despite this, the progress is real, as the natural momentum of this dynamic country supports relatively high average growth rates. As my friend Gurcharan Das is fond of saying "India grows at night" (he even wrote a book with that title!). Some transformations are organic, and happen in spite of the government rather than because of it. This causes me to be overall very optimistic about the Indian economy over the medium run.