It's the economy, stupid.

Just a few days after increasing India's sovereign rating to investment grade Moody's has suddenly woken up to the prospects of stagflation in the economy. While commending China for keeping growth at 9% while bringing inflation down to 4% Moody's has been surprised by the slowdown in India. Increases in interest rates have not brought down the rate of inflation while slowing growth. To increase growth " .... interest rates may have to be eased, but above all, rampant corruption needs to be stamped out , and authorities need to liberalize regulations that currently suppress local and foreign investment". Everyone can see that except the politicians who are trying every dirty trick in the book to make the Lokpal a completely useless organisation which will be unable to stop criminal politicians and thieving civil servants merrily looting the country. This is not a subject for debate about the supremacy of parliament as the freeloading press has made it but treason wherein a bunch of criminals condemn the country to poverty to protect their black money. Meanwhile India's foreign currency reserves fell by $4.67 billion in the week ending December, 16. This may have been due to the RBI's ill-judged attempt to support the rupee against its precipitous fall against the dollar. So desperate is the RBI about foreign investors or FIIs fleeing the Sensex combined with falling Foreign direct Investment or FDI that it has removed all controls on Non-Resident External accounts. Banks are now paying up to 9.6% on NRE deposits compared to 3.8% previously. While drawing in more dollars in the short term this will only make our balance of payment much worse as non-resident Indians and foreigners take advantage of the marvelous arbitrage opportunity wherein they borrow at 0% interest in the US and invest here at 9.6%. One man has presided over the booming corruption and collapsing economy but the treacherous press has hyped him up as a World Famous Economist as well as an Honest Man. History will write the truth about this fellow but, sadly for us, history is usually posthumous. Gad save India.