Approaching the point of maximum uncertainty ; The events of the past few months leave a question mark on India's medium-term growth prospects and, thus, equity valuations have been shattered.

The world is going through a crisis the likes of which most of ushave never seen before. The excessive gearing of the past 25 yearshad taken gross debt in the US to over 300 per cent of GDP and abreakdown of this debt super cycle will likely slow global growth,dragging the world into a recession. It may take several years torestore the confidence of the system. India has been affectedadversely by this, although this conclusion may appear surprising tothe lay observer. After all, India derives less than 14 per cent ofits GDP from exports, runs a relatively closed capital account anddoes not seem overly dependent on global growth. However, India wasa big beneficiary of the very …