Global liquidity crunch reaches India – Indian banks reeling in fear refuses to lend any further
Balaji Reddy
Jan. 20, 2008

The Indian financial systems can be much worse than the international financial institutions are gauging. The Nano car is here without adequate roads t5o drive on and enough expendable income to buy gasoline. Similarly Indian fiscal and financial management was ridiculous based on ‘grabbing on to American European wealth at any cost.’

As America goes into deepest depression in its history, India has started feeling the taste of super depression in the ‘globalized and wired’ environments.

The main source of Indian prosperity was Foreign Direct investment (FDI). In essence American and European companies were bringing in truckloads of dollars and euros to get a piece of the pie of Indian prosperity in the new millennium. The befuddle westerners could not do much in their own country and therefore looked at India and China as safe heavens.

India does not understand that these FDIs will have to be returned. India is in no position to ever return this money because they used the same in subsidizing the petroleum products and building low quality infrastructure.

Indian banks were cautious in lending today even as liquidity was in surplus as they geared up for outflows in the market. Call rates, at which banks lend and borrow for their daily fund requirement, hovered around 5.5-6 per cent. However, RBI mopped up around Rs 4,650 crore from the market today compared with Rs 12,000 crore on Monday.

The effect of tagging Indian economy to a sinking Titanic – the American economy will cost high for the Indian politicians. American depression and fiscal chaos will sing the word ‘Great Depression of India and China.’

Global liquidity crunch reaches India – Indian banks reeling in fear refuses to lend any further
Balaji Reddy
The effect of tagging Indian economy to a sinking Titanic – the American economy will cost high for the Indian politicians. American depression and fiscal chaos will sing the word ‘Great Depression of India and China.’
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