Strong expectations from a weak state

Smart people from the investing world, with years of experience, were waiting for the government to deliver a financial package, which would support businesses — like the governments of the US and Japan have done. Their hopes were belied — once again — and the markets sank in disappointment. And yet, the next time there is a similarly gloomy scenario, you can bet that the same people will have the same expectations. The Indian state has been weak, and remains weak. But our expectations from it remain strong. If we misjudge the state’s capacity in an area (economy) where it is easy to get data, draw upon well-documented history, and use well-applied economic concepts, what happens when we are in