The biggest threat for India at the moment is ....?

We have a question for you. What, according to you, is the biggest threat to the economic stability of India? Is it high inflation? Or is it budgetary and current account deficits? Here is something shocking. If the International Monetary Fund's latest annual assessment (as reported by Mint) of the Indian economy is to be believed, the biggest threat for India is excessive corporate leverage. In other words, the balance sheets of Indian companies and banks are sitting on a huge debt pile. Indian companies are in the worst financial health in almost a decade. In fact, the IMF goes on to point out that Indian companies are way more leveraged than other emerging markets. Indian companies rely on foreign funding for about 20% of their debt finance. It must be noted that the debt risks are concentrated in certain sectors such as construction and infrastructure. As such, investors must exercise prudence while investing in these sectors. The same would hold true for investor s looking to invest in the recently beaten down banking sector stocks given that they have a significant exposure to such sectors that are dong through tough phases at the moment.