The problem with India is a political problem. Indian poverty can be cut by 70% if there is genuine change in Indian politics without sacrifice any other expenditures or raise tax. I think Indians are as intelligent as Americans, Russians, Europeans, Chinese, or Japanese. But why is India so much more backward as compare to these other countries? The reason is the nature of politics in India. Its not just the policies but the fiber of the political institution. Once this can be throughly transformed, than India would be in the path of long term, sustained, growth.
We know that India has been growing. But the currently growth is base on policies of a economic guru, not the transformation of the politics in the country. Once the current leadership step down, India would not be able to sustain the growth unless it finds another economic guru. With elections cycles in India, its highly unlikely that another economic genious would come to power and sustain the high growth rate in the last few years under MS.
So India needs a political transformation that would rely on the institution instead in the policy of a leader.