We have high regard for opinions of people who are willing to stand out of the herd and make bold decisions. Noted economist Nouriel Roubini is certainly one of them! It is worth noting that he was one of the few experts who saw the 2008 financial crisis coming.

An article in the Economic Times notes that Mr Roubini who is known for his bearish views, is relatively upbeat about India. As per him, India has a strong advantage over China and European economies in the exports of services. And to keep this competitive advantage intact, India must invest in human capital and skilling building.

On the flip side, he raised concerns about India's manufacturing sector. In his view, India should find ways to compete with China. The latter has been flooding India will cheap goods. This has resulted in a massive trade imbalance with China. While he offers a rate cut as a short term solution, he believes India needs to solve structural issues in the manufacturing sector.

We do agree with Mr Roubini on most counts. The interest rate cut, however, will depend on how inflation pans out. If the current trend in commodity prices persists, the RBI might have room to cut rates. But playing with monetary tools is always a short term solution. Much more needs to done on the policy and infrastructure front to sort out long term issues.