The dramatic depreciation of the Indian Rupee raised alarm bells. It also made the Indian Government who was in denial mode, wake up and take note of the crisis India is in. The primary reason for India's current economic crisis is a deceleration of growth. All the economic growth indicators have reached decadal lows.
Was it all avoidable? There are ways of looking at India's present economic woes marked by a rapid fall in the value of the rupee caused by persistent inflation of the past few years and the high current account deficit (CAD) of about $85 billion (4.5 per cent of GDP) which needs to be funded through uncertain capital inflows year after year. Although the Union government has undertaken some reforms, more needs to be done. What India really needs and desperately so is an environment where unnecessary regulation, corruption and red tape is done away with. The failure of public private partnership has been the key reason for India's infrastructure story not making any headway. But once the government shows some resolve to sort out bureaucratic hurdles in time bound and transparent manner, investments in both infrastructure and manufacturing will become forthcoming. And that would automatically kick start the chain of economic activity the country has been starved of over past two years.