Want something else to worry about? You might add India to the list.

The religious violence shaking the eastern province of Orissa is certainly one threat to the stability of the largest democracy in the world, as Manmohan Singh, the Prime Minister, has claimed.

The turmoil in the financial markets, however, could reinforce India’s old suspicions of capitalism and undermine its recent economic transformation. Economic worries are likely to strengthen its impulse to protect itself against the market, as the Government showed us this week. As politicians rush to blame the US and capitalism, that may distract attention from the failure of the Government to push through reforms in the good times.

That sour tone of blame in search of a culprit dominated the summit of three emerging market countries in Delhi yesterday. “We are the victims of a crisis generated by the rich countries,” said Luiz Inácio Lula da Silva, the President of Brazil, to his Indian and South African counterparts.

In an alarming warning of how quickly officials might reach to barricade the doors, the Indian Steel Minister announced that he was considering a 5 per cent import duty on steel and the removal of a 15 per cent export tax to help Indian steel companies. Protectionism of this kind would be a step backwards.

Shashi Tharoor, the Indian author, businessman and former UN UnderSecretary General, has described eloquently why capitalism has had a hard time in India and is still regarded with suspicion. “India’s nationalists associated capitalism with slavery because the British East India Company had come to trade and stayed on to rule,” he argued in the International Herald Tribune. “India’s leaders were convinced that political independence . . . could be guaranteed only through economic independence.”

For 40 years India gave itself up to a bureaucratic, xenophobic government. The result was that it grew less than half as quickly as the rest of Asia. The dazzling success of the past 20 years, when the growth rate doubled and the proportion living in poverty halved, should not be taken for granted.

Singh, the former Finance Minister who helped to orchestrate that boom, and on whom the US and Europe rested such high hopes, has been more inert than many expected. He cannot be blamed for the shadow of Sonia Gandhi, still head of the Congress party, who won the election before handing the prime ministership to him. A technocrat startled to find himself at the head of government, he has done less to liberalise the market economy than his record suggested he would. As he rightly said, the assault on some Christian villages by Hindus in the past week threatens the proud claim by India to be a secular democracy embracing many religions. The economic slowdown, and any retreat to the inward-looking past and the suspicions of the principles of capitalism, however, would also be a threat, condemning millions to poverty just as it seemed they might escape.

Singh needs to show that he will preserve the best of India’s past – its secular tolerance – and not the worst – its suspicion of capitalism and markets.

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