New Delhi, Oct. 8 -- The contrast couldn't be starker. India's macro fundamentals are running at great-nay, near-ideal-levels. Retail inflation is low and the Reserve Bank of India (RBI) has just lowered its forecast for this financial year. The current account deficit (CAD) is holding at a comfortable 1% of GDP. The fisc is in good shape, with bond issuance for this year's second half announced recently that confirms the government's commitment towards its glide path of fiscal consolidation.

A recent sovereign rating upgrade by S&P seems like a grudging acknowledgement of a tautology by the rating agency, rather than a big achievement.

Yet, global investors don't seem to be impressed. Foreign portfolio investor (FPI) flows into equitie...