From The Economist:
When Narendra Modi became prime minister of India in 2014, opinion was divided as to whether he was a Hindu zealot disguised as an economic reformer, or the other way round. The past three years appear to have settled the matter. Yes, Mr Modi has pandered to religious sentiment at times, most notably by appointing a rabble-rousing Hindu prelate as chief minister of India’s most-populous state, Uttar Pradesh. But he has also presided over an acceleration in economic growth, from 6.4% in 2013 to a high of 7.9% in 2015—which made India the fastest-growing big economy in the world. He has pushed through reforms that had stalled for years, including an overhaul of bankruptcy law and the adoption of a nationwide sales tax (GST) to replace a confusing array of local and national levies. Foreign investment has soared, albeit from a low base. India, cabinet ministers insist, is at last becoming the tiger Mr Modi promised.
Alas, these appearances are deceiving (see article). The GST, although welcome, is unnecessarily complicated and bureaucratic, greatly reducing its efficiency. The new bankruptcy law is a step in the right direction, but it will take much more to revive the financial system, which is dominated by state-owned banks weighed down by dud loans. The central government’s response to a host of pressing economic problems, from the difficulty of buying land to the reform of rigid labour laws, has been to pass them to the states. And at least one of the big reforms it has undertaken—the overnight cancellation of most of India’s banknotes in an effort to curb the black economy—was counterproductive, hamstringing legitimate businesses without doing much harm to illicit ones. No wonder the economy is starting to drag. In the first three months of the year it grew at an annualised rate of 6.1%, more slowly than when Mr Modi came to power.