A US think tank has blamed it on "bureaucracy and politics" for the hindrance to the progress of the Narendra Modi government, which came into power last year promising a change.
After one year of the BJP-led government rule, the think tank says that the "caution" is now seen in every field but not "enthusiasm", The Economic Times reported, citing a report by the Washington-based Hudson Institute.
"Caution and not enthusiasm is evident in every arena, whether economy, defence, healthcare, trade and investment, energy, education and labour," says the report titled "Modi One Year On".
The report says that the current government was voted to power by "a new generation of Indians" who want instant results.
"The new Indian electorate is aspirational and demands instant gratification and immediate results," it says.
The government has failed to pass the landmark reforms, such as land acquisition bill and goods and services tax (GST) bill, in the just concluded monsoon session of Parliament, as opposition parties disrupted the functioning of both the Houses demanding action against Minister Sushma Swaraj and others in Lalit Modi visa row.
The Modi supporters have been growing "impatient" over the performance of the government, it says.
"Yet there are tremendous opportunities before the Modi government: there is still tremendous popular support for Mr (Narendra) Modi personally, the corporate sector is still hopeful of change, the global environment has been helpful and India's demographic dividend is in India's favour," it says.
The report says that the growth seen in the Indian economy in the past one year is not due to the "government policies and actions", but mainly due to improved global economic conditions, like falling crude oil prices.
Global crude oil prices started falling since June last year, just a month after the Modi government assumed power. Slumping oil prices have led to increased consumption and a sharp decline in inflation in the country.
"Some government actions, such as 'tax terrorism' -- imposition of retroactive taxes on multinational corporations -- and the lack of implementation of tax and labor reforms, have hurt India's economic outlook," the report says.
Indian defence sector confronts many challenges and the country requires technology and investment to become "self-sufficient" in the sector. "To modernise its armed forces, India will need to diversify its arms acquisitions and streamline licensing processes," it adds.