Mumbai Terror Attacks: A serious blow to 'India Growth Story'

The nerve centre of India's commercial capital Mumbai is under siege by terrorists. Commando oprerations to flush out terrerists have started as I write this piece. In the past, markets have rebounded with vengeance after each terror attack. We have become so used to hearing the same old explaination of the 'Never say die spirit of the Mumbaikars' after each successive attack on Mumbai. Will this time be different?

Our hearts go out to those who have suffered during the troubled times. This is a time for serious introspection. This time it is going to be different, because this is a war on India, much worse than the 9/11 in the US. The anguish of the ordinary Indian has to come out openly to let the terrorists and the rulers think alike that enough is enough. It spells bad times for the markets, but then our survival as a nation is far more important than making a few bucks on the markets.

These attacks have come at a time when the economy is reeling under the impact of severe recession in the developed world. It will further erode the investor confidence in the Indian economy. Consumer confidence is also likely to suffer adversely. The immediate impact will be a pressure on the Rupee and falling bond prices. The end result will be a severe slowdown in the economic growth. The 'India growth story' will take a back seat for the time being. The ruling party at the centre is bound to fare poorly in the state elections under way. Meanwhile, investors should brace up for a turbulent period ahead in equity markets, the market may be heading for new lows in December. The worst hit sectors would be hospitality and transportation.

Let us hope our polity takes some positive measures to rescue the economy from this unprecedented crises, that essentially stems from our callousness in the past. This is a war on India and perhaps the last chance for the polity to revive the 'Spirit of the Nation'.