India’s once booming economy is sliding into a deep slump. The country grew just 4.4 percent this summer, a far cry from the 7.7 percent average for the past decade. Its currency, the rupee, has tumbled 16 percent against the dollar in the last three months. And analysts expect things to get even worse in the coming months.

Like Indonesia, Brazil and other developing countries, India has been hurt as investors have moved money to the United States to take advantage of the prospect of higher interest rates. But most of India’s biggest problems — like its high inflation, which was nearly 5.8 percent in July and has been rising partly because of the falling rupee — have domestic causes. Until the coalition government led by Prime Minister Manmohan Singh reforms the country’s economy, India will fall far short of its potential.

During the global financial boom of the mid-2000s, investors indiscriminately dumped cash into fast-growing countries and India’s shortcomings were easily overlooked. The financial crisis forced investors to pay more attention to fundamental problems in emerging markets. Analysts and business executives say the country has become even less hospitable in recent years. In the nine years that the coalition government has been in power, several ministers have resigned in corruption scandals; large infrastructure projects have been delayed by mismanagement; the government’s budget deficit has ballooned, thanks to wasteful spending like subsidies for diesel fuel; and politics have thwarted reforms in labor and education.

Mr. Singh has been an ineffectual leader without much authority. The real power is held by his political patron, Sonia Gandhi, who leads the Indian National Congress Party, which has expressed little concern for the country’s ailing economy.