Narendra Modi is being swept into office as India’s prime minister on a wave of optimism about his ability to restore the fortunes of Asia’s third biggest economy. But is he the leader to haul India out of its funk, and put the world’s second most populous nation back on track to rival China?
Investors think so. The prospect of a government led by Modi has boosted Indian stocks by 15% so far this year. The rupee has responded too, gaining 6% against the dollar after a dismal performance in 2013.
An economic turnaround will be more difficult to execute. It will require a level of political skill and collaboration that has eluded top Indian policymakers for years. India’s growth potential was once mentioned in the same breath as that of China. But the world’s biggest democracy has failed to deliver and its economy is just a fifth the size of its Asian rival.
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