Creative accounting will not protect against junk status.

Prof Nouriel Roubini is known as " Dr Doom " for his prediction of the collapse of the housing bubble in the US, also known as the sub-prime crisis, and the deep recession it would cause. He says that the loose monetary policies adopted by central banks to resume growth and reduce unemployment are already forming bubbles in various countries. Stock markets have recovered more than 100% since the lows of 2009 and high-yield junk bonds are back. Real estate prices are rising in Switzerland, Sweden and Canada as well as in China, Hong Kong and Brazil. This is because excess money supply is forcing funds to invest in risky stock markets of emerging economies to increase returns while zero interest rates are tempting people to buy ever more expensive properties, expecting prices to rise even higher . In India the Sensex scaled record highs of 21,321 before profit taking brought it down to 20,666 and property prices have risen 1000% since 2002. Low interest rates and black money is preventing a correction in property prices which is resulting in double digit retail inflation. Leading into next year's general elections the government is locked into a high spending mode but is committed to cutting the fiscal deficit at the same time. The only option was to increase revenues which led to savage rise in taxes on every kind of goods and services. The double whammy of taxes and inflation led to a fall in consumption leading to a fall in revenue growth. Government expenditure in the first half of the current financial year was Rs 8.09 trillion against a full-year target of Rs 16.65 trillion but revenue receipts have been only Rs 3.89 trillion compared to a target of Rs 10.56 trillion. To stimulate growth the government needs to invest in useful spending, such as infrastructure, but is committed to totally useless social spending to bribe the " vote bank ". The Food Security Bill has increased subsidy by 10% while the fertiliser ministry has asked for an increase of 50% in subsidy. To keep the fiscal deficit within control the government will " rollover " $15 billion deficit to next year's budget. " Whatever we need to do, we will do. But the fiscal deficit target will be met," said one Finance Ministry official. India's accounting method " never gives you the real picture of your finances," said Devendra Kumar Pant, Chief Economist at India Ratings and Research. Creative accounting, isn't that what Ramalinga Raju is accused of?