The astonishing election upset in India has put the future of its economic-reform program in question. With the victorious Congress Party depending on Leftist parties for parliamentary support, uncertainty is running high about the future of the country’s privatization, deregulation, and foreign-investment reforms.

Voters have sent a clear message about the need for broad-based economic growth that lifts all boats. But some members of the winning coalition may well misinterpret that message. India’s recent experience—and that of its Asian neighbors—shows that continuing rural poverty stems not from too much economic reform but rather from too little. Since liberalization began, in 1991, annual GDP growth has been twice as high as it had been previously. As a result, poverty rates have fallen by nearly a third in both rural and urban areas. The celebrated software and outsourcing industries are only the latest evidence of the effectiveness of the reforms, which have created hundreds of thousands of high-paying jobs and generated billions in export revenues.

The challenge facing the new ruling coalition is to extend the success of the IT and outsourcing industries into the broader economy. To that end, foreign investment and global competition must be allowed to reach more sectors,...