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India to gain from developed world's folly

The crisis is not over yet. Not by any stretch of imagination. The shockwaves from Dubai proved this in ample measure. The once sprawling emirate kingdom is now finding it difficult to repay its debt obligations. And investors are busy analyzing which one would be the next country to follow suit. Not that there aren't enough contenders. Infact, the list is bigger than any other time in history. As per LiveMint, OECD has already warned that the world's 30 leading industrialized economies will see their outstanding public debt to grow to 100% of their GDP in 2010,a near doubling from the percentage 20 years ago.

Now imagine what would happen if creditors refuse to lend to the governments anymore? While the governments could still resort to a lot of methods, sadly, none of them promise a swift and a strong recovery in the near to medium term. In other words, get used to anemic and subpar growth in economies with a significant amount of outstanding debt vis-à-vis the GDP.

So how will India gain?
The country's debt is not as high as some of its developed counterparts and secondly, its GDP growth rate is also significantly higher, an indication of good interest servicing ability. What's more, foreign investors disappointed with returns from developed economies, could turn to India in a big way.The frieghtened investors will look for greener pastures - and India, with its latest GDP numbers, is surely a one for them to give it a miss! So, we can see another bull rally, going forward.

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