Apparently I did a lot of India growth stories through my postings. In the month of April when S&P downgraded India BBB- ? that is the last rung in the ratings grade of S&P ,downgrade from here meaning India will be having speculative grade rating. I am very positive about it I don’t believe India’s growth problems are mainly related to global slow down. They are more structural in nature & need systemic changes.
Yesterday again S&P gave the red signal that India could be 1st BRIC to lose investment grade. Just look back at the time when India wasn’t investment grade. Did it matter? No rating changed much after things were good.
I am certainly surprised by the pessimism about India’s economy. India was used to the ‘Hindu growth rate’ of about 3.5-4% or so for quite a long time. The very fact that an expected growth rate of about 6% over the next couple of years has resulted in everyone – from the ‘jackass media’ to the corporates and the ‘common man’ – baying for the government‘s blood is, in my opinion, a decent development.
You may see the push now otherwise it can be true that the government cannot hope to return to power if it continues to work as it has been. It will have to take decisions, however unpleasant and unpalatable to itself and the public.
As you know yesterday some remarks were made against the rating agency by the politicians it would rather than berate the rating agencies, we should buckle down to the needed reforms as we see them necessary.
To be precise “spirals of optimism” take place in markets and economies, so to do “spirals of despair”. India is suffering from the second type of spiral today and it is not clear what might break it. But eventually something will come along—“India is going to come out on top.