has done it again. The country’s economy outpaced all other major
markets during the most recent quarter, further cementing its reputation
as a bright spot in an otherwise gloomy world economy.
Yet as Prime Minister Narendra Modi celebrates his second anniversary in
office, there is growing unease over India’s prospects. Some have called
into question the validity of the country’s GDP statistics, which have
diverged from other indicators. Industrial production and investment
spending fell at the end of 2015, and exports remain weak.
Some critics argue that economic reality is being disguised by low oil
prices, which have slashed India’s huge energy import bill.
"Another set of remarkably strong GDP data will do little to dispel
doubts about the quality of the official national accounts numbers,"
said Shilan Shah of Capital Economics.
Modi, leader of the Hindu nationalist Bharatiya Janata Party, has
generated huge amounts of buzz around India’s economy. As prime
minister, he has spent huge amounts of political capital trying to push
common sense economic reforms through parliament.
Another of Modi’s priorities — reducing red tape for small businesses —
has scarcely progressed. India ranks 130th in a World Bank index
measuring the regulatory burden on small firms, an improvement of just
four spots from 2015. The country’s infrastructure remains woefully
inadequate, and will take decades to upgrade.