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Tuesday, June 12, 2012

India facing strong headwinds on Economic / Political front

Blogman's Notes: Though the following article paints a somewhat rosy long-term Economic picture of India because of its relatively young population, the fact of the matter is that India's Economic, Political, and Social problems are deep rooted and may not be easily resolved, if they can be resolved at all, which in my opinion they cannot. Even if the long-term prognosis is rosy, as this article points out the short-term Economic and Political problems in India are very acute. All this data that is now becoming public knowledge reinforces my view that India is headed for a major internal crisis that could lead to civil war. India has a history of sectarian violence and war between its many cultures, so it would not take much for social strife and worse to flare in this ancient and diverse land.
India: Top Dog In the Long-Run … Economic Crisis In the Short-Run | ZeroHedge the short-term, India has big problems.
S&P has just threatened to downgrade India to junk.  The Telegraph notes:
The rupee weakened and shares tumbled after Standard & Poor’s warned that a slowdown in economic growth and the political paralysis on economic development gripping the country carried the risk of re-rating.
Currently India’s BBB- rating is just one level above junk status and the lowest in the Bric ‘club’ which has Brazil, Russia and China as its other members.
Joydeep Mukherji, a New York-based S&P analyst, said: “Setbacks or reversals in India’s path toward a more liberal economy could hurt its long-term growth prospects and therefore its credit quality.”
Growth in the booming Indian economy has slowed with the loss of export business in depressed European markets while business leaders are deadlocked with the Government over economic development plans and policy changes. Corruption scandals have not helped India’s image while some foreign investors say they now get a cooler reception.
Read More: India: Top Dog In the Long-Run … Economic Crisis In the Short-Run | ZeroHedge 

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