India\u2019s coalition government just celebrated the third anniversary of its tenure with a self-congratulatory banquet that could not have been more poorly timed: India\u2019s currency, the rupee, is falling; investment is down; inflation is rising; and deficits are eating away at government coffers.<\/p>\n
While short-term growth has slowed but not ground to a halt, India\u2019s 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\u2019s elected leaders must address difficult, politically unpopular decisions \u201d\u201d or risk even deeper problems.<\/p>\n
\u201cWhen India was being run comparatively well in 2008, they seemed to cope with these external shocks, at least from a financial perspective,\u201d\u009d said Glenn Levine, a senior economist at Moody\u2019s Analytics in Sydney, Australia. \u201cI think people are starting to question the long-term Indian story. That is the difference now.\u201d\u009d<\/p>\n