Did you hear the good news? India's economy grew at an (annualized) rate of 5.5 percent in the second quarter of 2012 (the last period for which data is available).
But wait: India averaged 8.1 percent growth from 2004 through 2011 -- a period that included the global recession. What sort of Pollyanna is ready to give high marks for 5.5 percent?
This modest number did, in fact, beat growth in the first quarter of 2012. But the real story here is how rapidly expectations have evaporated that India's day in the sun had finally arrived. With hindsight, it's not difficult to explain the slowdown: Interest groups that have more to lose than gain from rapid growth have managed to reassert their veto power over dislocating economic reforms. And in India's messy, corrupt (albeit democratic) political system, it is very difficult to take back the ground lost to defenders of the status quo.
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Indian politics isn't about to change. A big question, then, is whether India's brand of governance is really compatible with a return of eight-percent-plus growth, or whether the world's second largest country is going to have to make the journey to affluence one fumbling step at a time.
It's easy to forget that India was the poster child of failed development strategy. From independence in 1947 to the late 1980s, it averaged just a shade more than two percent annual growth, barely enough to offset population growth. Pretty much everyone agreed long ago that the Indian economy had potential -- fine elite education, a culture of enterprise, a wealthy diaspora eager to prove itself back home, and a common language that happened to be the language of international business. But it was horribly burdened by a venal bureaucracy, a hopelessly overtaxed infrastructure, and (worst of all) an ideology of self-reliance and central economic planning that had largely isolated Indian markets from global competition.