India Emerging.....?

Its true that India is an emerging economy. Its true that western companies are looking to India to diversify their business. But current events happening here don't bode well for the immediate future.
Consider few facts.
1. Sensex gone down to where it started growing up. Its below 12000 (contemplated to go below 10000) now from up 21000 just few months back.
2. FII are deserting our markets. Pulling back their money and creating liquidity crunch in the market.
3. Corporates finding it difficult to build up capital to grow their business.
4. RBI yesterday announce to cut the CRR to 8.5% form 9% to ease the liquidity flow releasing 20K crore in the market.
5. This may aggravate already up moving rates of inflation.
6. We had forex of $324 billion 2 months back. They have come down to $300 billion now.
7. The least hit sector by the slowdown by US economy is retail India because of its domestic demand. But Reliance Retail is thinking of integrating all its retails units (hypermart, supermart and fresh) because they are finding it difficult to maintain the profits.

If the reverse flow of FII continues, what worst can happen is the repetition of east Asian crisis of 97-98. This time it would be India.

Why western economies are looking to India is because compared to them we are less hit. Its just that 'Bangladesh is better than Somalia.'
May be if this wave fades off we would be better placed than west. They will have lost their homes and we will have our homes having cracked walls. We can give them shelter, we can fill up the cracks in our wall, we can help them build their homes again. Till then we will have to wait when the deluge fades off...