India’s crisis of confidence

When it rains, it pours. The monsoon showers have been tardy this year but criticism of India’s economic management from domestic and international investors amplified by the financial press has become a virtual torrent.

P Chidambram, India's progressive finance minister

Bad news is followed by worse. No sooner does the government buckle under political pressure to postpone every item of business reform than markets tumble, the rupee sinks and international rating agencies rush to pull the plug. Standard Poor’s, Fitch and Moody’s have all been harsh on Indian sovereign and corporate debt, especially that of its banks.

India’s...