On July 26, 1991, Manmohan Singh -- then Finance Minister , and later Prime Minister for 10 years -- rose in Parliament to deliver an address that would transform India. That speech, outlining the first budget of a just-elected government under Prime Minister P.V. Narasimha Rao, launched India’s journey of economic reform, dismantling many decades-old socialist-style controls on the private sector.A quarter-century later, much has changed. India, once cruelly mocked for its “Hindu rate of growth” -- per capita GDP growth of just over 1 percent a year -- is now the fastest-growing large economy in the world. Its economic landscape has been altered completely; it’s no longer the agrarian economy it was in 1991. For citizens who lived through the grey isolation of the decades before “liberalization,” the vibrant and globalized India of today looks and feels like a thoroughly different country.Sadly, however, one thing hasn’t changed since 1991: India continues to under-perform. It may be growing faster than its peers, but as central bank governor Raghuram Rajan has pointed out, that amounts to little more than being a “one-eyed king” in the land of the blind. Growing fast when the world is growing too, as China did for decades, is one thing. Growing slightly faster than anyone else when the world is in a slump is a totally different sort of achievement.India is capable of growing in double digits, but even today, it continues to set limits on its growth. No government since has fully committed to the reform process that Singh began. No Indian leader -- not even Singh during his tenure as Prime Minister -- has really tried to convey to Indian voters exactly why the economic freedom that seemed within grasp back then was important, and more of the same would transform their lives. Thus the reform process remains woefully incomplete.True, under successive governments since 1991, external trade was largely liberalized; moderate tax reform was undertaken; and some effective regulatory bodies were set up. Regardless of the political orientation of the party in power, some market-friendly reforms get carried out.But these reforms are all “gradualist”-- a word popular in India to describe the plodding pace of its liberalization program. Every government has shied away from unshackling those areas of the economy that are considered politically “sensitive.”For example, agriculture -- in spite of the sector’s abysmal productivity in India -- remains largely untouched by change. Farmers still can’t sell their land freely and the government tightly controls marketing of their produce. Factory owners still struggle to comply with dozens of byzantine rules, most of them holdovers from the socialist past. And India is on the cusp of a banking crisis thanks to poor lending by the state-controlled banks that no government has dared to privatize.The seeds of this failure were sown at the very beginning. While the reform process Singh rolled out in 1991 was a triumph in many ways -- it slashed industrial licensing rules, freeing up producers and consumers -- it didn’t go far enough. Prime Minister Rao was a cagey career politician with no ideological affinity for free-market liberalism. His government began the liberalization process because it had no choice: A decade of overspending had caused India to confront a balance-of-payments crisis that pushed it close to the edge of default.Even as Singh diluted industrial licensing and reduced tariffs, then, Rao chose to pretend in public that nothing had really changed -- although he later tried, in the words of an official close to him at the time, to give his actions “a retrospective coherence.” A couple of years after 1991, the economic pressure was off. Politics-as-usual returned and Rao slowed the reform program to a crawl.That pattern has repeated itself since. Most Indian politicians have imitated Rao’s craven unwillingness to embrace the market, preferring to “reform by stealth” instead. Nor are the benefits of greater economic freedom and openness -- which has lifted hundreds of millions out of poverty in India -- explicitly spelled out. As a consequence, even as India’s reforms have been successful by many measures, there are still few politicians who see electoral benefits to being a reformer. Even Prime Minister Narendra Modi , who some hoped would cut red tape everywhere, Thatcher-style, has turned out to be a cautious tinkerer, constantly mindful of imagined political costs.The costs to India of this embrace of gradualism are grave. The agenda of 1991 remains incomplete. Had genuine structural reform been undertaken then, Indian industry would have had the flexibility and dynamism needed to be competitive in today’s world. Instead, the government continues to control and meddle in markets, causing India to become, paradoxically, a desperately poor, high-cost economy, struggling to employ the millions who join its workforce yearly.The big applause line in Manmohan Singh’s 1991 budget speech was cribbed from Victor Hugo: “No force on earth can stop an idea whose time has come.” Sadly, if liberal economics was that idea, than the 25 years since suggest that Indian politics has been able to stop it quite effectively.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.