Indian summer - FT.com As with the peripheral eurozone countries, it has taken a mood of crisis to persuade the Indian government to resume its economic reforms. Slowing growth, accelerating inflation and a widening budget deficit meant that India's sovereign credit rating risked being cut to "junk" unless the government snapped out of its torpor. Reinvigorated by the appointment as finance minister of Palaniappan Chidambaram, the cabinet led by Manmohan Singh, the prime minister, has unveiled a series of "big bang reforms." These include raising the heavily subsidised price of diesel, opening the retail and aviation sectors to foreign investors and selling stakes in a range of state-owned companies. All these policies make economic sense. There are more direct ways to transfer money to India's poor than via a subsidy which also benefits the middle class. Investment in the retail sector will reduce food waste and help to keep food inflation in check. Partial privatisations should help plug some holes in the public finances. The question is whether these policies will be implemented or if Mr Singh will be forced into yet another U-turn. Plans to reform the retail sector were shelved less than a year ago following protests by small shopkeepers. This time Mr Singh seems to have played his hand more shrewdly. In deciding that individual states can opt out of the retail reform, the prime minister should weaken the opposition of regional parties. They can choose not to implement the policy in their state instead of seeking to boycott it at national level. The bet is that when they see the benefits being enjoyed by those states that do reform, they will want to join in. One should be under no illusion, however, that this package will revive India's ailing growth. It will take years before their impact is felt on the economy. New Delhi's real challenges are cutting bureaucracy, improving infrastructure and passing a land and a labour reform, rather than opening foreign direct investment in a few sectors. But in facing up to those who oppose its reform agenda, the government has sent a strong signal to investors. After years in which India has lost ground vis a vis competitors such as China, Indonesia and Vietnam, this push, if successful, could help revive some much-needed optimism. In the 1990s, Mr Singh helped to transform India for the better. However late and incomplete, his attempt to do the same two decades later deserves support.