(iv)  What is the outlook for India? Why has India been hit by the crisis? The ferocity with which the global crisis hit India dismayed many. And this dismay stems from two analytical strands. The first analytic goes something like this. The Indian banking system has had no direct exposure to the sub-prime mortgage assets or to the failed institutions.
It has very limited offbalance sheet activities or securitized assets. In fact, our banks continue to remain sound and healthy. So, the enigma is how can India be caught up in a crisis when it has nothing much to do with any of the maladies that are at the core of the crisis.