Party time for India in Davos.....but hold on a minute.

Steve Hamm

Once again, the world's business and political thought leaders have gathered in the Swiss resort town of Davos, and, once again, India is being toasted and is toasting itself. I'm watching from afar, in NYC, but avidly reading the coverage in news stories and blogs. My strongest impression is that there is a lot of happy talk about India and its prospects, which is appropriate, but not much talk about its challenges. People seem to be papering over the country's infrastructure deficit, which, by some measures, is slowing GDP growth by 2%. And, coupled with that is the problem of the haves and the have nots. The vast majority of Indians have been left behind as the tech economy takes off. And they vote. Signs of trouble are already showing up. Pro-business and pro-reform politicians are being defeated at the polls, replaced by people who promise voters free TV sets, free water, and free electricity. Wrapped together, the infrastructure problem and the country's unruly politics constitute a serious challenge to India's aspirations to become one of the world's top economies. So, sure, Indians should party at Davos. But unless they make huge amounts of progress back home, the hangover could be quite painful.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.