About 1,200 companies have so far declared full-year results for 2015-16, averaging top-line growth of 3.7% in the quarter through March after an 8% decline over the three preceding quarters. But poor corporate health is reflected in the staggering write-offs of bad loans by state-owned banks. Punjab National Bank, the country’s third largest, reported a net loss of $593 million for the year and gross nonperforming assets of $8.3 billion.  

Exports fell in April for the 17th straight month. The Reserve Bank of India has cut interest rates five times to a five-year low, but the manufacturing sector shrank 1.2% in March, and investment and capital formation are moribund.  

A good monsoon this summer after two years of drought may boost consumer sentiment and spending and revitalize manufacturing. In another good sign, sales of tractors, light commercial vehicles and two-wheelers are rising, indicating that the vast rural economy is waking up again. Modi’s third year could be his best yet.