It began in 2008. To win the general elections in 2009 the Congress resorted to open bribery by awarding useless civil servants massive pay rises, forgiving loans to farmers and starting a scheme to pay rural people for 100 days a year for doing nothing. This injection of liquidity resulted in increased consumer spending so that the Indian economy grew while western countries were gripped by the sub-prime crisis. Increased liquidity added to huge rises in black money led to unreal property prices and a doubling of the Sensex. Foreign money flooded into these sectors leading to a strengthening of the rupee even as inflation was rising. With rising inflation and rising deficit one would expect the rupee to weaken but hot money from foreign investors kept it strong thus keeping inflation somewhat in check. In 2010 the rupee was 44 to the dollar even as inflation was near 10%. The RBI suddenly woke up to the danger and started to raise interest rates but inadequately so that inflation has stayed at 10%. The combination of high rates and inflation is hitting consumer spending which, in turn, will lower tax collections. Builders are sitting on large inventories but cannot reduce prices because they bought land at exorbitant rates. Banks have stopped lending to builders but may still be looking at huge non performing assets. The government had hoped to raise Rs 400 billion from disinvestment to keep within its deficit target but it seems that it will be able to raise only Rs 10 billion. Foreign investors are selling out. The rupee is down to 49.42 to the dollar adding to inflation. In a global economy looting the taxpayer will be punished. We will suffer.