The pace of economic reform in India is in danger of slowing. India began dismantling industrial licensing, cutting tariffs and rationalising its tax system in 1991 in response to an economic crisis. These reforms gained momentum but never managed to capture either the ideological imagination or the political centre.
It was argued that an incremental approach would allow time to build a political consensus for reforms, protect the economy from unnecessary risks and prevent a backlash. But there are signs that the opposite has happened. Instead of a consensus there is more dissent; instead of solidifying a constituency for reforms, India risks a backlash against them.
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