Cash ban turns India's promising start in 2016 into damp squib and adds to next year's woes

Mumbai

INDIA started 2016 as the world's fastest-growing major economy, but at its end the nation faces a significant slowdown and the delay of what's been hailed as Prime Minister Narendra Modi's greatest reform - the creation of an integrated marketplace.

Much of the pain is self-inflicted as Mr Modi's decision last month to drain 86 per cent of currency in circulation stalled spending and caused a political stalemate on a landmark sales-tax reform. It's an apt end to a busy year that's included a change of guard at the central bank, the overhaul of a century-old bankruptcy law and the biggest battle to rock corporate India in decades. And it's sown the seeds for a tumultuous 2017.

"Reforms will have long-term structural benefits but carry short-term execution and adjustment risks," said Abhishek Dangra, a credit analyst at S&P Globa…