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Until recently, much of the world’s smartest money was backing the globe’s largest emerging countries – the so called BRIC nations, Brazil, Russia, India and China.

The man that coined the acronym was Jim O'Neill, the Goldman Sachs chief economist, who in recent years has perhaps been India’s most influential evangelist. He invented the term in a paper that spelled out the potential of the emerging world giants in 2003. What caught everybody's eye was the audacious suggestion that – under certain conditions – India's economy could surge past that of the United States by 2050.

This was heady stuff for a socialist republic that had existed as an economic backwater since its birth six decades ago. Indeed, there have been moments when the forecast has seemed to go to India's head. Talking to The Times recently, however, Mr O’Neill was at pains to stress that the country's advance relies on several preconditions.

Too many clients have often regarded his projection as a fact, Mr O'Neill complained -- making it quite clear that he does not. To underscore the point, he recently wrote a follow-up report, which stresses that India's advance to economic superpower status depends on radical improvements being made in areas ranging from fiscal discipline to primary education standards and crop yields.

It sometimes feels like many of those in India who consider such things have fallen into the same trap as Mr O’Neill’s clients – and presume that India’s rise if inevitable. How else to explain how so many Indians put up with the corruption most encounter on a near-daily basis; or soaring rates of farmer suicides; or that millions of children are forced to work for a living and grow up illiterate?

Perhaps the recent shock many of them have been through will help rouse them?

In January, India looked in excellent shape. Annual GDP growth was motoring at close to 9 per cent, corporate profitability had risen 20 per cent in a year while the stock market had surged 50 per cent.

Today, Bombay's benchmark Sensex index has lost 50 per cent of its value. Foreign investors have fled the market. The rupee is at a six-year low and there are fears that India’s banks will be sucked into the sub-prime debacle. Fitch, the ratings agency, recently downgraded the outlook on India's sovereign debt, taking it just one step from junk status. The country’s deficits are yawning and the poster child of its manufacturing ambitions – Tata’s Nano, the world’s cheapest car – has just been derailed by a dispute between big business and small farmers.

In private, traders at Goldman Sachs no longer talk about India as an “emerging market” – they call it a “submerged market”.

All of this happened in a matter of months: If ever there was a lesson in not taking things for granted this has been it. So yes, India can catch up with (or surpass) the West, in terms of the size of its economy, but its rise is far from inevitable.

By way of a postscript: is India "catching up" with The West really the fitting phrase? Here's a snippet from Shashi Tharoor’s “The Great Indian Novel” which asks that question. Told that India is “an underdeveloped country”, the book’s hero disagrees. India is no such thing, he says. Rather it is “a highly developed one in an advanced state of decay … everything in India is over developed, particularly the social structure, the bureaucracy, the political process, the financial system, the university network…”

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Rhys Blakely is the Times Correspondent in Bombay