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India's recent announcements of much-needed reforms will give the economy a tentative breather, but concrete implementation is crucial from preventing the Asian giant from tumbling to junk status.
This time around, it is evident that India is serious about lifting the country out of its economic misery and keeping its investment-grade rating.
After enduring embarrassing moments over whether it will be the first Bric nation to be downgraded to junk, India has snuffed out the imminent danger of such a credit move by announcing a number of reforms that would help plug the widening deficit and inject foreign cash into the capital-starved economy.
In a commendable move on September 14, the government said it will hike diesel subsidies by INR5 per litre (US$0.10) and raise foreign investment caps on sectors such as aviation and cable networks to 49% and multi-brand retail to 51%, even as it cost the ruling Congress party the support of the Trinamool Congress, a major political party ally.
That's why the Indian government deserves a standing applause for braving up to this difficult task. Prime Minister Manmohan Singh's rare, televised speech from his office on September 21 has also helped cement confidence that he and his party will do "everything necessary" to make sure these reforms are implemented, albeit reminding the public that it will require difficult decisions.
But the fact that Singh felt the need to emphasise that these reforms will be followed through also reflects the concern that implementing these measures...