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The Indian economy is falling short on just about everything that it needs to do to see it sail through this choppy weather. The latest casualty is the dip in the GDP growth numbers that came in at 4.4% for the first-quarter as against an expected 4.7%. Thirty basis points might not look like a lot when the sailing is smooth, but against the backdrop of slowing numbers, it's a huge set back; and a tremendous under-achievement for a country that was pacing growth at close to 7% even after the Lehman crisis.

India Inc leaders including Rahul Bajaj(Chairman of Bajaj Auto ), Anand Mahindra, Kiran Majumdar Shaw(CMD of Biocon.), Krish Gopalakrishnan, Deepak Parekh have said the
government has lost control over the direction of Indian currency and it needs to expedite reforms. A $20 billion bill to feed India’s hungry will further deepen the economic crisis, they say.

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NREGA and Food Security Bill

Interest rates in the short-term are higher than long-term interest rates, and in classical economics when this happens, the yield curve usually points to a recession. Says R Sivakumar, head fixed income, Axis MF: “Whenever the short-term rates shoot up in classical economics, it is usually followed by a recession. There's clearly a case that we should be worrying now.”

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Moody's recently warned that the food security law is negative development for the country's sovereign rating.

With a general elections coming, CEOs and analysts are not very optimistic that the Prime Minister Manmohan Singh will be able to get any reforms off the ground. FDI in retail has been a non-starter; no news of hiking FDI in insurance, and there are no takers for FDI in defence. In spite of PMO’s clearance of stalled projects – now at a massive $120 billion – none have taken off so far. Corporates are not bidding for billion dollar infrastructure projects like Sewri-Nhava Sheva sea link project as they say the land acquisition laws and environmental clearances are making projects unviable. The only good news so far this year has been good monsoon rains which will boost agriculture production. Companies, across all sectors, meanwhile, are either cutting jobs or are freezing appointments. The CEOs are already warning that the lag impact of a falling rupee and rising crude oil prices will stoke inflation.

Top foreign investment banks HSBC and Nomura have downgraded their Gross Domestic Product (GDP) growth estimates for India after the economy grew lower-than-expected in the June quarter. While HSBC cut its GDP estimates for the country to 4% from 5.5% in 2013-14, Nomura lowered its expectations to 4.2% from 5%, retaining its negative outlook for the economy over the next three to six months.