Hardly an 'Incredible India' anymore

Frustrated executives while away time in five-star hotels waiting for deals that never come, and civil servants play video games in their offices - growing signs of the reform limbo and crisis of confidence behind India's economic malaise.

Policy paralysis, corruption scandals and a government fearful of political backlash to any bold moves have combined with the global slowdown and worsening domestic finances in the last few months to derail Asia's third-largest economy.

India now faces the worst-case scenario that was touted earlier this year - stubbornly high inflation, slowing growth, a mounting fiscal deficit, a rupee that risks freefall - and both policymakers and the Reserve Bank of India (RBI) have few levers to fix it.

For years, Indian entrepreneurs have boasted they can do business despite the government - adeptly working around potholed roads, clogged ports and reams of regulatory hurdles.

But government inertia - what many politicians see as "playing safe" - is taking its toll on corporate confidence.

Entrepreneurs once feted in Bollywood movies as national heroes, whose million-dollar homes and jetset lifestyles were a beacon for millions of India's aspiring middle classes, no longer seem capable of driving the $1.6 trillion economy.

"We may have seen phases of economic growth slower than this in the two post-reform decades, but never has the entrepreneurial mood been so low," wrote Shekhar Gupta, editor-in-chief of the Indian Express.

Image: A pedestrian walks past a poster for the "Incredible India 2003" Business Forum in Kuala Lumpur on December 2, 2003.

Text: Alistair Scrutton and Manoj Kumar, Reuters

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