Indian economy is at the bottom of the cycle now and therefore having all the usual symptoms of macroeconomic ills, low growth and job creation, high inflation and interest rates, high twin deficits, currency volatility, low asset quality and institutional stagnation. While it is true that global cycles has a major role to play in this it is widely acknowledged that a fair part of it is homegrown. The question of interest at the present juncture is to identify the real challenges facing the Indian economy and plausible solutions to come out of it. The basic challenges in the near term are broadly three as we see it. At the top of the priority list is the revival of the investment cycle. A few preparatory work by a revamped bureaucracy in the form of Cabinet Committee of Investment and faster clearances of projects have already been initiated. Also despite skepticism, a lot of progress has been achieved in the area of power, road and airports. Next focus areas should be railways, urban infrastructure and housing.