. . . The current account deficit at nearly 5% of GDP (vs. a sustainable level of 2.5%) and rising interest rates could push the country’s credit rating into junk territory, says Surendra Kaushik, a professor of finance at Pace University’s Lubin School of Business.
“The political environment, excessive public spending programs on consumption, labor market imperfections, corruption and low business confidence are likely to keep things the way they are for a while,” Kaushik said in an email. The government will not likely pursue aggressive economic reforms in the near future with elections in five states in December and national parliamentary elections in mid-2014, he added.
Read the story in Investor’s Business Daily.