Fortunately, the recent threat of a downgrade of Inda’s sovereign credit rating – which would have made it difficult to finance the current-account deficit – has led to a government reshuffle and a shift in policies. The key political change was the appointment of a new finance minister, Palaniappan Chidambaram, whose selection by Prime Minister Manmohan Singh and Congress party leader Sonia Gandhi sent a strong positive signal to the Indian business community and to financial markets.