India’s coalition government just celebrated the third anniversary of its tenure with a self-congratulatory banquet that could not have been more poorly timed: India’s currency, the rupee, is falling; investment is down; inflation is rising; and deficits are eating away at government coffers.

While short-term growth has slowed but not ground to a halt, India’s problems have dampened hopes that it, along with China and other non-Western economies, might help revive the global economy, as happened after the 2008 financial crisis. Instead, India is now facing a political reckoning, as the country’s elected leaders must address difficult, politically unpopular decisions — or risk even deeper problems.

“When India was being run comparatively well in 2008, they seemed to cope with these external shocks, at least from a financial perspective,” said Glenn Levine, a senior economist at Moody’s Analytics in Sydney, Australia. “I think people are starting to question the long-term Indian story. That is the difference now.”

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