Record Spanish debt; Scepticism on India death verdict for rapists; Analysts divided on India recovery

1 Record Spanish debt (BBC) Spain's public debt reached a record high in June, the country's central bank said. The figure has risen to 942.8bn euros ($1.3 trillion), equal to 92.2% of the country's entire economic output, the bank said. This is nearly 15% higher than the same period last year and above the Spanish government's target limit of 91.4%, despite severe public spending cuts. Austerity measures have led to street protests as unemployment now tops 26%.

Prime Minister Mariano Rajoy's government is aiming to reduce public spending by 150bn euros between 2012 and 2014, but rising unemployment and the consequent benefit payments, is making this target difficult to reach. The bank believes public debt could top 100% of gross domestic product over the next three years, its highest level in more than a century, as the government struggles to revive the country's flagging economy.

Mr Rajoy may derive some comfort from other figures showing that the country's debt-laden banks have been successfully reducing their borrowing from the European Central Bank (ECB) over the year. Spanish banks borrowed 249.3bn euros from the ECB in August, making it the 12th successive month their borrowing has fallen.

2 Scepticism on India death verdict for rapists (Ellen Barry & Betwa Sharma in The New York Times) There was no mistaking the whoop of joy that rose outside Saket District Court in New Delhi on Friday, when word got out that four men convicted in last December’s horrific gang rape and murder had been sentenced to death by hanging. But some of India’s most ardent women’s rights advocates are sceptical that four hangings would do anything to stem violence against women, a problem whose proportions are gradually coming into focus.

After intensive public discussion of the case, some changes followed with extraordinary speed. Reports of rape have skyrocketed; in the first eight months of this year, Delhi’s police force registered 1,121 cases, more than double the number from the same period in 2011 and the highest number since 2000. The number of reported molestations has increased six-fold in the same period.

Polls show that Indians remain ambivalent about using the death penalty, with 40 percent saying it should be abolished, according to a survey by CNN, IBN and The Hindu, a respected daily newspaper. For many months already, advocates for women have questioned whether death sentences in the December case would distract people from the more difficult question of why Indian girls and women are so vulnerable to sexual violence.

“A base but very human part of me would like them to suffer as much as they made that woman suffer,” wrote Nilanjana S. Roy in The Hindu, noting that most rapists are not strangers. She went on to envision the result if convicted rapists were hanged consistently for a year: 10,000 neighbours, shopkeepers, tutors, grandfathers, fathers and brothers.

Ms. Nundy, the Supreme Court litigator, said the real challenge lies in shaking up the criminal justice system, which is desperately short of judges and mired in outdated thinking about violence against women. Upon receiving a report of rape, she said, police investigators still routinely use a “two-finger test” to determine whether the victim has a prior sexual history; if the answer is yes, she said, the likelihood of a conviction plummets.

3 Analysts divided on India recovery (Anant Vijay Kala in The Wall Street Journal) India’s better-than-expected industrial output data released this week have divided economists on whether or not the country’s ailing manufacturers are headed towards recovery. The data surprised analysts with a 2.6% increase in industrial output. That was much better than the median estimate in a poll of 16 economists by The Wall Street Journal for a 0.5% contraction. It even exceeded the most optimistic prediction for a 2.1% increase.

While some economists were hopeful that surprisingly strong number points to an economic revival, others warned it could just be a flash in the pan. Sceptics argue that July’s growth was mainly driven by a sharp increase in capital goods output, a number that has been inexplicably volatile in the past and hasn’t always been a reliable indicator of changes in the broader economy.

Radhika Rao, an economist with DBS Bank, says July’s jump in capital goods output alone lifted industrial production by 1.9 percentage points and without it the headline rise would have been less impressive. She also pointed out that consumer durables output, a more reliable indicator of the health of the real economy, shrank 9.3%.

There are still India bulls out there though. Optimists say the country’s economy isn’t faring as bad as many think and a recovery could take place as early as October. Credit Suisse says given the recent strength in India’s exports, it makes sense that industrial production bounced.