Modi's Fatal Weakness

It's been almost three years since Narendra Modi took over as prime minister of India -- but, in many ways, it feels longer. Modi's domination of Indian politics, and of Indians' imagination, is complete; no alternative seems possible, every challenger has been defeated. But bad economics has a habit of catching up with its practitioners eventually. And for all his political success, Modi's mismanagement of the Indian economy may yet be his downfall.

When he became prime minister, in 2014, Modi was welcomed by market-friendly liberals convinced that his record as a pro-business leader of Gujarat state meant that he'd be a reformist in New Delhi. Reality was a harsh let-down. Modi's government has certainly instituted reforms worth noting -- a nationwide tax overhaul and a new bankruptcy law, for example. But he hasn't moved as aggressively to expand the role and power of markets as many had hoped. At best, he's about as market-friendly as the government he replaced.