These days there seems to be only one topic of discussion as far as the economy is concerned: The performance of the Modi government in its first year. There have been many opinions from all quarters. Most people seem to believe that the year gone by has been a mixed bag. It would certainly appear that way.
The government has moved forward with reforms in the energy and defense sectors as well as the labour market. Key economic bills pertaining to real estate, insurance, mining and coal have been passed. Some steps to curb corruption have also been taken. Financial inclusion has received a boost with the Jan Dhan Yojna. The coal and telecom auctions were a big success. The current account deficit (CAD) and inflation are slowly coming under control (although with a lot of help from falling commodity prices globally). The government has no doubt shown a lot of positive intent. However, intent only works up to a point.
Many have begun questioning the government's apparent lack of focus and direction regarding many specific issues. However, up until now, this government hasn't been critsized in a general broad based manner like the UPA government was. Unfortunately for the Modi government, its luck may soon run out on this front as well.
Take the case of rating agencies. These agencies are not concerned about sector specific issues. Their job is to take a broad based macroeconomic view. So when S&P says that India's sovereign rating won't be upgraded any time soon, it is certainly a cause for concern. The agency has pointed out to the lack of substantial, high quality reforms, in the absence of which, India's rating is likely to remain at the lowest investment grade of BBB (negative).
India has certainly come a long way since the dark days of UPA-2 in 2013. However, by no means have 'acche din' arrived for the economy. The government will have to undertake significant reforms in multiple areas if it hopes to attract global capital and improve the country's sovereign rating. It certainly cannot take a high growth, low inflation scenario for granted.