India has always been a country subject to the most violent mood swings. About a year ago, it seemed as if we could do nothing right.

The '90s which had looked like the era of opportunity had come and gone and we were still plodding along.

The only glittering jewel in the crown was the world-beating software industry that had held its own in different corners of the globe.

Here we are in September 2003 and we can scarcely spy a dark cloud on the horizon. The stock market has climbed by around 1000 points in the last year and hardly paused to catch its breath.

One economist, when asked recently about the danger spots in the economy, confessed that he couldn't think of any.

Small investors appear to share that view and -- forgetting about the Harshad Mehtas and the Ketan Parekhs -- are racing back into the stock market.

The pendulum has clearly swung in the opposite direction. Now the question being asked is whether we are heading towards a Chinese-style era of unstoppable, booming growth.

The optimists believe that Indian industry has gone through a period of healthy adjustment and is now ready to face the world.

Meanwhile, the Indian middle-class has become larger and richer than ever before. Now India, say the optimists, really is the giant market that excited global corporations through the '90s.

There are some signs that the optimists could be right. The Indian two-wheeler industry is now the second largest in the world and is belting along at a fair clip. Even the auto industry has been boosted by a combination of cheaper credit and duty cuts.

Cheaper credit is also spurring a construction boom in India's cities and towns. The Indian middle-class is suddenly discovering that it's less expensive to buy than to rent and the result is an unprecedented housing boom.

Meanwhile, shopping malls are springing up by the dozen and a retail revolution is taking place before our eyes. The only problem -- if you can call it that -- is that there aren't enough retailers to fill the spaces. If all this isn't enough, millions of square feet of office space are rising from the earth.

What are the potential worries in this tale of cheer? For starters, there's politics. A general election is due but that's the least of the problems. After the 1998 nuclear tests, India earned the reputation of being a global hotspot.

That was only the prelude to Kargil and the headline making hijacking of IC-184 to Kandahar. After that came the Gujarat earthquake followed by the attack on Parliament and the India-Pakistan stand-off.

If all that wasn't enough we had the ghastly Gujarat riots. Narendra Modi may deny it, but the riots gave India a black mark that will take a long time to erase.

The last year has been remarkably quiet by Indian standards but it doesn't need a crystal ball to figure out that a few more killings or encounters could alter the mood swiftly.

It also goes without saying that the rough and tumble of Indian politics scares foreign investors. More importantly, it has the effect of turning bubbling optimism to gloom even at home.

Are there other black spots that could turn the dream to dust? All booms carry within them the seeds of a bust and it's already possible to pick out the weak points that could develop.

Some glitzy malls are already running into trouble because the promoters are new to the game and haven't understood the basics of retailing.

What will happen if these temples to commerce can't lure shoppers? Similarly, smaller builders are finding it tougher to find buyers for apartment blocks.

Also, there's a heavy dependence on the software and BPO boom. About 80 per cent of the office space being built is for these two industries.

If growth in these industries doesn't keep pace with expectations, it would have a devastating effect on the real estate barons who are sinking crores into deep foundations.

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