Winter session blues

The bad news just keeps on coming. The US-based ratings service, Moody’s, has downgraded its outlook for India’s banks — marking it now as “negative”, rather than “stable” — because of concerns about the financial system’s asset quality, capital adequacy, and profit-making. While the heads of India’s largest banks sound pretty incensed — and the ratings oligopolies have not exactly covered themselves with glory in the last few years — this is nevertheless a strong message: the world is turning bearish on the India story. And it would be foolish not to recognise the real effects of the outlook downgrade: the rupee has depreciated further, as foreign investors lose confidence in Indian investments.

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