NEW DELHI – As the New Year dawns, it has become increasingly clear that India’s new government faces a dilemma entirely of its own making – one that its predecessor never had to confront.
Narendra Modi’s election as Prime Minister in May 2014 was initially hailed worldwide as marking the advent of a more business-friendly government in the world’s largest democracy. Encouraged by Modi’s pro-market sound bites – he vowed to “replace red tape with a red carpet,” declared that the government has “no business” in business, and campaigned on the slogan “Make in India” – investors rushed to praise him as a new messiah of development.
Modi’s Bharatiya Janata Party (BJP) gained the first absolute majority in the lower house of parliament in a quarter-century, thereby freeing it from the pressures and constraints of coalition governance. Modi’s trips abroad brought talk of new business opportunities, a wave of foreign investment, and joint ventures. He vowed to improve India’s ranking in the World Bank’s global “Doing Business” report, from a dismal 142nd place to at least 50th…….