Concerning time for India - GDP growth @ 6.9% ( Q2/2011~12)

After seeing 8.5% GDP Growth in FY 2011, India is witnessing slowdown in the GDP growth. During the last one year lot of factors are playing around the World and inside India which has led to a 6.9% GDP growth for the second quarter of the current financial year . It all started with the Rating downgrade in USA which forced lot of FII to pull out money from India. That followed by the Debt crisis of Europe which again drained the FII money flow to India. These factors lead to very poor show in the Equity market in India. The SENSEX came down heavily and the Primary market (the so called IPO) has almost vanished from India. Investor’s wealth has eroded substantially and the Entrepreneur cannot dare to enter the IPO market expecting debacle. This has resulted into almost close window for any additional equity infusion to the Business. All big ticket industrial investment has gone. The Euro zone crisis has lead to safe heaven investment and USD has been the darling of all international Investor. The huge depreciation of INR against USD has impacted severely to the Indian Business houses and the overall Trade deficit and Current account deficit of the Country. Inflation which is maintaining at 9%+ due to several reasons has forced business houses to cut production and manufacturing sectors has shown lesser activities. As most of the business houses do business with borrowings the interest cost has gone up significantly leading to lesser profit. Capex has been put on hold by all categories of business houses. To make the matter more critical Government of India has done nothing. They failed to control inflation. They could not create consensus for big policy decision. Lot of time has been wasted by Government to defend itself from opposition / media attack on corruption. If India wants to go back to the 9%+ growth rate a positive environment need to be restored by the Government by announcing all pending reforms in a big way which will create enthusiasm in the mind of all stake holders of Indian economy