Governance crisis

When the going gets tough, the dollars get going. That is why the rupee has shed some 16 per cent against the Greenback in less than four months. And because those pulling out dollars to meet liquidity contingencies arising from Eurozone worries and uncertainties in the US – the FIIs – are the biggest investors in the Indian market, it has led to a decline in the Sensex as well. But these arguments ignore the fact that Indian stocks have been among the worst performers (the Sensex has gone down by 23 per cent so far in 2011) and the rupee has fallen more than any other currency in Asia (or even emerging markets, barring a South Africa or Turkey). 

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