Why Indians were in denial..

Indians were in denial mode since the begining of slowdown in Oct 07.. the reason given was that India is insulated from the world, exports are very small part of the economy, large demand is domestic etc etc.

what actually happened?? the growth came down from closer to 10% to 5.1% and may fall further... now the saying is "we are still growing while the world is contracting".

I think all of us who are in India needs to understand that capital flows are a global phenomenon and India is very much an integral part of it. Indian growth happened because of external capital was available and that could create demand.. now the external capital source is gone and we are back to traditional modes of financing through the banking channel.. obviously we will growth at rates prior to 2003 levels till the capital flow resumes..

Second, directly through exports and indirectly, through capital and oil imports, we are part of the global trade. Any repurcussion of this would have an impact on us..

So, all of us need to get used to slower growth..