We are insulted because we are poor.

Credit rating agency, Moody's says that high inflation combined with low growth could lead to a rating downgrade for India. That seems paradoxical because India's debt to GDP ratio fell to 66% in 2012-13 from 83% in 2002-03 despite an average fiscal deficit of 7% over that period. Indian government borrowing is mostly domestic so foreign lenders such as banks, sovereign funds and the IMF cannot exert any pressure. All the government has to do is print some more notes to pay its debt. This causes inflation but that helps by reducing the overall value of the debt. So what are Moody's gripes? Uncontrolled inflation reduces consumer demand by making everything more expensive. This, in turn, reduces sales and forces companies to stop new investments, maybe even to fire employees, increasing unemployment. Reduced consumption reduces indirect tax collections while lower employment reduces direct taxes, hitting government revenues and increasing deficit. This causes the rupee to drop in value increasing prices further. In an attempt to curb inflation the Reserve Bank increases interest rates which increase borrowing costs for businesses, further reducing new investments. Although it has fallen, India's growth to GDP ratio is highest among developing countries. In 2013 it was 67.9 compared to 60.3 for Brazil, 42.9 for Philippines, 24.5 for Indonesia and 34.4 for Turkey. Moody's is warning that high inflation with high interest rates will suppress growth and this will reduce tax collections leading to uncontrolled fiscal deficit, at which point we will be reduced to junk status. The Congress says that this is due to ' external environment ' which is a complete lie because the deficit is due a massive increase in spending on useless social schemes to win elections. The Food and Agriculture Organization says the food prices fell globally by 4.4% in November and 3.5% in December. Over the whole of 2013 it was down to 209.9, 1.6% lower than in 2012. Food inflation in India was 20% in November and has been running at over 10% for years. That is because the government pays a higher price to farmers for grains and has been hoarding grains for the Food Security Scheme to bribe voters. With elections due shortly there is not hope of cure. When you are junk status other countries will sexually assault your diplomats.