"The government getting the hell out of the way" has in fact been responsible for all of the progress that India has made in the last two decades, starting with the economic liberalization of 1991 precipitated by an IMF bailout of the country's economy, marking the end of a sorry period of socialism (1947-91). http://en.wikipedia.org/wiki/Economic_liberalisation_in_Indi...
In the late 90s, the telecommunications sector was deregulated somewhat, and this accelerated in the early 2000s. As you probably know, this led to an explosive growth in cellphone penetration, which benefited the economy greatly and had a very significant effect on alleviating poverty. http://www.businessweek.com/magazine/content/02_06/b3769124.... http://www.businessweek.com/magazine/content/07_39/b4051058....
IMO, India is a textbook example of the ills of regulation, protectionism and resistance to globalization. It is sad that the lessons are not being learnt (by other developing countries).