A striking feature of the 21st century economic and financial crises is the sheer pace at which financial disasters fly uninhibitedly across continents. Another unique trait of the current era is the utter magnitude of the ongoing turmoil. The debt crisis that the developed world is facing is not just pertaining to a particular sector of the economy. The malaise is a lot deeper and bigger, engulfing finances of entire economies. But the problems haven't just appeared suddenly out of the blue. They are the result of years of recklessness and petty politics. The US and the Eurozone have no choice but to suffer the consequences. These economies are dying under the weight of poor economic growth and high indebtedness. A slew of austerity measures are further killing all possibilities of economic revival.
Just last week, credit ratings agency Standard & Poor's cut India's rating outlook to negative from stable. The main reason for this is our large fiscal deficit and the slow reform engine, which is facing several political roadblocks. Well, this is India's wake up call. Unlike the developed economies, India is not facing any immediate systemic crisis. Moreover, India has favourable long term growth prospects. With some discipline, the country's finances can be made leaner. By learning from the mistakes of developed economies, India can leapfrog into a better future. But unfortunately, our political establishment does not have the vision, will and courage to take bold steps. Unless we reach the brink of a major crisis, no major changes or reforms are likely to happen. We hope the government proves us wrong.