Worrying signs for anyone who wants to see Modi succeed have to be the fact that while Modi and his party campaigned on massaging the gold import duty, it is untouched in the new budget. Another worrying sign has to be the gold announcement. See, India is going to exchange "old, impure gold" for newer, better gold.
When the standardization operation was over, the new gold acquired will be delivered to its overseas custodian, the Bank of England. The entire exercise will take place through book entry and without any cash exchanging hands, sources said.
This would mean the Indians are going to entrust their gold to the same cronies that the Germans have been trying to get their gold from. The Austrians are nervous enough about their gold in England that they are going to audit their holdings. The Austrians want to verify that is exists, while the Indians are going to send their gold over there without worries. That gold is going to disappear.
Did Modi have any control over that? Probably not. That's the problem. India is the world's biggest democracy. No one ever says most efficient, best run or least corrupt. India has a civil service known for mountains of old files and magnificent golf handicaps. India is not China and it is not Russia, and therein lies the systemic problem. Modi has to worry about elections and parliamentary methods. He has to deal with a free press and NGOs. If the state or political machinery were more like Russia or China, I'd have more faith that Modi will reform, renew and move things rightward. The British communist Harold Laski did not spend years influencing the men who would build the Indian system to see it not be a tremendous and enduring piece of socialist machinery. Good luck Modi.