A few right steps

Rising deficit, falling rupee, stubborn inflation, stagnant investments, a dropping Sensex and policy paralysis have cast a dark shadow over the Indian economy. Has the macro-economy deteriorated as much as it is perceived to be? Is the situation beyond retrieval? The Sensex has fallen in price as well as valuation terms for the whole of 2011. However, it is still trading at a premium to its peer group. The Foreign Institutional Investors’ confidence is visible in terms of marginal outflows this year (as compared to large outflows in 2008). Notwithstanding the gloom around, that is reassuring.

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