Staring at last chances

Mass psychology plays a very big role in determining the shape of the political economy. If economic agents, such as producers and consumers, start believing things are turning for the worse, indeed they do start becoming worse. This has broadly been the case with India over the past year and more. A combination of circumstances — a virtual paralysis of domestic governance and the rapidly worsening economic prospects in the West —- has created a somewhat depressed sentiment in the local political economy. However, it is equally true that bad news also has a natural cycle of playing itself out.

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