Corruption in India is a model of efficiency

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"Coal has become one of the main sources by which money is funnelled to the political parties," he said sadly. "And it's true whichever party gets into power."

Some other state industries were worse, he claimed. So I can understand the sentiments in the Letter from London, published yesterday in India's Economic Times. A friend of the paper's London correspondent, bemused at the news of moats and mortgages, exclaims: "Indian politicos are so much more efficient at corruption."

If anyone was expecting a long age of financial sobriety to follow the GFC, as acronym-loving Indians have christened the Global Financial Crisis, it hasn't happened in India.

The Sensex stock market index has shot up 80% in just three months, and is now back where it was in August 2007, just before a final frenzy pushed it to its hysterical January peak.

If Thursday's speech by Indian President Pratibha Patil, the first to the new parliament, is anything to go by, the new Congress-led government isn't planning to use its unexpectedly strong new mandate to bring in a new era of prudence either.

The government just reported a fiscal deficit of 6.2% (the reality, once huge off-balance sheet items are included, is above 11%). But Patil focused on further spending to stimulate the economy.

In this, she was only matching the demands of industry: Assocham, one of India's biggest business lobbies, has placed advertisements in business papers calling for

$11 billion in further fiscal stimulus in the coming July budget (so they're not quite as confident as their investors).

The hope for the government is that some of the money flooding into the stock exchanges can replace what's flowing out of its accounts.

Rahul Khullar, the civil servant in charge of selling stakes in state companies, says the Indian government could raise $21 billion over the next four years. But it had better hurry.

Khullar only expects to float two state companies this year. The rest will come over the next four. There's no certainty today's bullish markets will last that distance.