The reasons are fairly obvious. We start from a low base of GDP from which impressive rates of growth are noticeable. India still accounts for a very large concentration of poverty and of illiteracy, and hence fruits of development either may not reach or are inadequate. While employment in organized sectors has virtually stagnated, in recent times, insecurity in employment has crept in.
In other words, an episode of high inflation alone does not necessarily imply the reversal of low r* over longer horizons. Even though it may be tempting to extrapolate the current situation to the future, we cannot assume that it automatically marks the end of the long-standing secular decline of the natural rate.