HATE OR HEALTH?:

To start with, Mr Modi should recruit an economic team that is based on competence and experience rather than affinity for the Bharatiya Janata Party's Hindu-nationalist ideology. It must tackle both the financial crisis and sagging demand. To fix the banking system, the banks and the lightly regulated shadow banks that have recently been lending heavily need to be stress-tested and, where necessary, the banks recapitalised. Eventually, the state-owned banks could be privatised and the shadow banks put under the same prudential regulations as other lenders.

A broader privatisation programme would give the government the money it needs to succour demand. It should make use of levers such as the national rural-employment scheme to get money to the distressed hinterland. In the longer run, the tax system, labour laws, the regulation of land-ownership and fiddly, protectionist tariffs should all be given a thorough overhaul.

Many of these items have been on the to-do list of every Indian government for decades. But the long history of stasis only strengthens the case for change. And in Mr Modi, with his vice-like grip on parliament, his reputation as a friend of business and his need to right a foundering economy, India at last has a leader with the power and the incentives to push through big reforms.

The fear is that, instead of getting to grips with the economy, Mr Modi will stop posing as a reformer and fully embrace his alter ego, as a chest-thumping Hindu nationalist. Just months into his second term, he has already abolished India's only Muslim-majority state and is threatening to expand to the rest of the country his scheme to hunt down supposed foreign interlopers in Assam. In the face of India's growing economic problems, Mr Modi's focus on communal grievances seems even more reprehensible. Alas, he may yet draw the opposite conclusion.

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