India’s latest rush of reforms

The Indian government has moved to make it easier for foreigners to invest in the weakening economy.

In India "it takes an economic crisis" to get politicians to implement potentially painful economic measures, says The Economist. Prime Minister Manmohan Singh, who unleashed rapid growth in the 1990s when he liberalised the economy, is now attempting another "rush of reforms".

Annual growth has slumped to 5%. The global slowdown hasn't helped. Nor has India's stubbornly high inflation, which has prevented the central bank from cutting interest rates. But a key problem has been a fall in investment, which is a direct result of the government backsliding on its recent reform efforts. This has put off foreign investors and created uncertainty. Government overspending has also crowded out the private sector.

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