The path for a developing country to achieve sustained, elevated economic growth isn’t complicated: It requires a stable monetary base; a restrained tax code; easy-to-follow rules governing the ownership of private property; and a court system that fairly adjudicates the laws governing contracts that gives no undue preference to the narrow interests of the government or domestic businesses in order to attract foreign investment.
However, while it may not be complicated, these simple edicts can be difficult to achieve for many countries, as foreign companies investing in India have learned firsthand.
Indian Prime Minister Narendra Modi was swept into office in 2014 on a populist wave with a promise of boosting the country’s economic growth and ensuring that it benefits citizens across the income distribution.