Political calculations and parliamentary gridlock are putting the brakes on Prime Minister Narendra Modi’s already-incremental plans for economic revitalization 15 months after Indian voters gave him an overwhelming mandate for change.
Following nearly a month of partisan bickering, lawmakers ended a parliamentary session on Thursday without passing a centerpiece of Mr. Modi’s agenda—a constitutional amendment to replace a thicket of differing state taxes with a more business-friendly nationwide levy.
The Indian leader, worried about political opposition and a backlash from rural voters, also effectively abandoned efforts to win approval for another development measure—legislation that would have made it easier for the state to acquire land for infrastructure and industry, government officials, some ruling party and opposition lawmakers said.
Mr. Modi shot to prominence with a landslide electoral victory and impassioned vows during visits to world capitals to reset India’s economy. But blocked by the opposition and reluctant to take risky political steps, his liberalization project is languishing.
“The slowdown in the reform momentum has taken away the type of optimism we saw when Modi was elected in 2014,” said Chua Han Teng, an India specialist at London-based BMI Research. “It hurts investor confidence.”