A false dawn

The collapse in India’s growth over the past year and a half is driven by a deep-rooted unwillingness to invest on the part of corporate India. One reason for this is the high cost of capital in a restrictive, inflation-fighting interest-rate regime. And, the other reason is a climate of regulatory and policy uncertainty. Of late, stirrings of activity in New Delhi have led to something of a false dawn — various incremental measures have been announced, and the capital markets have been given a few reasons to be excited.

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