India’s economic reform agenda has lost its way. Forget trivial reforms like permitting more foreign direct investment in aviation. What the country needs most is improvements in chronically mismanaged infrastructure. But change is hard when the systems are working, even badly. So a huge power outage — the worst blackout for more than a decade which left more than 300 million people without electricity — and yet another unnecessary crop shortage — due to a weak monsoon — could prove a blessing. New Delhi’s reform programme has become synonymous with opening markets to foreign competition. While such liberalisation would be good for India, the chronic failures in power and water management are more pressing and the economic pay-off from improvement would be much greater. Read More
