Narendra Modi will soon get his last chance to make a good first impression on investors. He will likely disappoint them, but only because they expect too much.

This weekend, the Indian prime minister’s government will present its annual budget before Parliament, a statement not only of the country’s public finances but also the direction of its reform. This is his second budget since winning a landslide election last May on a promise to rejuvenate the economy. The first one in July underwhelmed, and that has only increased...