To spur economic growth in the $1.8 trn economy, which is Asia's third largest, there are various ideas being considered. For example raising the limit on foreign investment in local debt, reducing taxes on such investments, relaxing rules for Indian companies to borrow abroad and opening sectors like defence, telecoms and media to further foreign investment.

In a bid to attract more foreign capital India is reviewing existing limits or "caps" in various sectors. A report is due in mid-May after a final meeting of a committee set up to review FDI limits in sectors. Many caps were introduced at different stages of the economic reforms process which began in July 1991. The committee now wants to look at each sector's cap to establish whether in fact it served a purpose and continues to do so. Otherwise the cap should be relaxed or removed.

So why has this change of heart finally occurred in seriously reviewing FDI limits? After all nothing happened, apart from rhetoric, for many years on opening sectors to foreign investment. We mentioned in our report of 12 March 2013 "We view the current economic slowdown as a positive factor for India. Why? Because the country acts best in a crisis. Just like in 1991 when it was forced to open up the economy and introduce economic reforms." Finance Minister Mr Chidambaram has been the architect to contain the fiscal deficit, push for reforms and attract foreign capital which is so badly needed to fund the record current account deficit which hit an all-time high of 6.7% of GDP in the December 2012 quarter. He has also helped India pull away from the brink of an ignominious credit downgrade by global credit agencies, S&P and Fitch. But, India is not yet out of the woods on the downgrade.

David Fuller's view Governance is Everything, as we often say at Fullermoney, not least concerning India. Investors are in favour of Mr Chidambaram's proposed economic reforms, judging from India's rally recently, reflected by the Sensex and Bombay Bank Index. However, his minority coalition government is struggling to secure passage of the necessary bills, not least because defeat could bring forward the next general election.

I maintain that India has terrific long-term potential. However, it is not for faint hearts or gentle souls, as the disappointments are many, including volatility.