Indian Prime Minister Narendra Modi (left), President Pranab Mukherjee (centre) and other senior figures on their way to parliament (photo: dpa)

Tough decisions on reforms will test new Indian government

Reviving the flagging economy is the top priority for new Indian Prime Minister Narendra Modi. A broad plan of action is already evident, leading analysts to upgrade their growth forecasts. But deep-rooted reforms to address declining foreign investment, the fiscal deficit, infrastructure problems and inflation require agile political footwork and a fair amount of good luck. Meanwhile there is little evidence that he will be especially proactive on foreign policy.

<em>A broad agenda of reforms is already evident as new Prime Minister Narendra Modi attempts to revive the Indian economy. In the long term, however...

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 Pramit Pal Chaudhuri
The prime minister is likely to struggle with more difficult Indian neighbours including Pakistan - though Islamabad is expected to give India most-favoured nation status
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