The diminishing trend of the market reveals the apprehension that the European crisis and meltdown-stricken America has hit the Indian economy as well. It is a matter of great concern that the share market has registered more than 12 percent loss in the last three months. The recent fall down has been triggered by the State Bank of India being downgraded by an international rating agency. Precisely, the share of banking sector is already in turmoil. Going by this situation, it is obvious that companies will have to face many challenges and odds to collect funds. If it is thought that the falling trend of the market is not an indicator of any crisis, however other aspects of the economy are obviously worrisome. The continuous depreciation of the rupee against dollar has had wide ramification. The Foreign Institutional Investment is becoming quite frail. The skyrocketing price hike has also added to this misery. It is disappointing to know the view of RBI that if key rates are increased, it would bridle the rising trend of inflation. However, this formula has fizzled out, it is assumed that the RBI could again raise the interest rates.

The RBI cannot ignore that rise in interest rates have created myriad problems resulting into negative impact on the economy as well. It seems that our policy makers are not willing to accept that right now the Indian economy is now not stable. Some time back India, Russia and Brazil had offered to help out European countries facing economic meltdown, but such offer does not have any meaning when the Europeans are not ready to solve out the crisis seriously. If the European countries are not keen on consolidating the base of their economy, there is no need for India to extend helping hand to dispel their economic crisis. But the situation has taken a different turn and it is better for our policy makers to shift their spotlight to the debacle of the Indian economy. The world now feels that India requires a second phase of economic reform, but it is saddening that the government shrugs off responsibilities to make a concrete step in this regard. India cannot be insulated from the meltdown in this globalised economic system, but the ministers and mandarins are supposed to seek a way out of the growing crisis.