Panic? What panic? It is all calm in India. Everyday we are being told that the fundamentals of our economy is sound, that, except for ICICI, our banks do not have any significant exposure to foreign banks and that our economy is driven by internal consumption with exports being only a small part of the GDP. All correct except that it is only a small part of the full picture. Since this government was elected four years ago it has increased indirect taxes, expecially on services, by a huge amount. This gave rise to a hidden inflation but as long as food prices remained reasonable and the economy continued to grow because of easy credit in the whole world it was able to get away with the bluff of 'Incredible India'. The Sensex reached 21000 and house prices were rising on a daily basis. Then oil and commodity prices went stratospheric and inflation zoomed to 13%. The Reserve Bank raised rates to 9.5%. The consumer is hit by a triple whammy of huge inflation, high taxes and high interest rates leading to high interest payments on outstanding loans. The rupee has collapsed from 39 to the dollar to 47 which will further fuel inflation by increasing import prices including oil. The Reserve Bank will have to maintain a high or higher interest rate which will cut growth. A weak rupee would have stimulated tourism except for this government's pathetic failure to deal with terrorism. Our freeloading press continues to repeat the lies of the politicians. Incredible India or Imbecile India?