Global rating agency Moody's Investors Service last week cut India's outlook from 'stable' to 'negative'. It warned that the Indian economy could be heading for a debt trap and recessionary phase, adding that the ongoing credit crunch among non-bank financial institutions is unlikely to be resolved quickly. The government vehemently opposed this view, adding that India, one among the fastest growing major economies in the world, has strong fundamentals.

It is true that the Indian economy is not doing that bad. In fact, IMF, in their latest World Economic Outlook, has pegged India's growth at 6.1 percent in 2019 and up to 7 percent in 2020. Fitch Ratings and S&P Global Ratings still hold India's outlook at 'stable'. It is also noteworthy that several reforms have consistently been undertaken along with policy measures in response to the global slowdown. The Centre adds that inflation is also under check. It seems the economy has hit the bottom already and now is the time for a recovery.

But complacency can be dangerous. A heat-map prepared by CEIC and Nomura Global Economics has found most of our macroeconomic data -- passenger vehicles, two-wheeler, tractors, LCV and HCV sales, etc. -- slipping into the red since first quarter of the current fiscal. Meanwhile, more recently, a survey shows that the business confidence index of the country declined by 15.3 percent during the August-October quarter. These developments are not at all encouraging.

Now, let's look at latest IIP figures. In September, industrial production declined (-) 4.3 per cent, shrinking to the lowest level in eight years. All three broad based sectors of capital goods production, consumer durables, and infrastructure and construction goods contracted. This data is discouraging. Only recently, the IHS Markit India PMI index had fallen to a two-year low of 50.6 in October, and now the IIP data has further raised pessimism. Our policy makers must not turn a blind eye to these negative trends.

I invite your opinions.