MARGARET THATCHER said that you cannot buck the market. But if the experience of India’s government over the last few months is anything to go by, you can charm the pants off it. My e-mail inbox is overflowing with missives from the finance ministry that promise a bounce in the economy, assert a step change in investor sentiment, deny there is a bad debt problem in the banking system and promise a stable tax regime. That love bomb is a huge change compared with 2011 and the first half of 2012, when the ministry nearly prompted a financial crisis by imposing retrospective taxes on foreign companies, terrifying equity investors with confusing rules and missing its borrowing forecasts. Everything changed in September when the government, led by a new finance minister, Palaniappan Chidambaram (pictured), proposed a mini-package of reforms. Since then he has been a one man source of animal spirits—expressing optimism even while conditions on the ground remain somewhat depressed. To a degree this has worked. One boss of a bank I interviewed just before Christmas says Mr Chidambaram is doing “an amazing job”. (Some even say he is a candidate for prime minister.) India’s stock market has risen (helped by the latest round of quantitative easing in America and by the rally across Asian markets). Debt spreads have shrunk to less worrying levels. Although local investors have remained circumspect, foreign funds have poured into India. It would be surprising if this financial pick-me-up did not assist the real economy. But just how deep is the commitment to better economic management? I’ve spotted three off-putting signs in the last few days. The first is the finance ministry’s decision not to renew the tenure of Subir Gokarn as deputy governor of the Reserve Bank of India (RBI) in charge of monetary policy. Mr Gokarn had been notably critical of the government and reluctant to cut interest rates. The central bank is not statutorily independent, but it is fairly autonomous and one of the few bodies in India that commands widespread respect. Government meddling is the last thing it needs at a time when inflation is still too high and a threat.

The second sign is the news that Vodafone on January 3rd was sent a reminder to pay $2 billion of retroactive tax. The letter was apparently sent by the tax authorities rather than the finance minister and it contained no deadline. Perhaps it is a bureaucratic cock up. But it flies in the face of the conciliatory signs the government had been making since September, and the investor-friendly draft conclusions of an official report commissioned into the whole retroactive tax affair. Making things even murkier, while a version of that report was submitted to the government in November, nothing has been heard since and its independent author has since reportedly become an employee of the finance ministry.

The final sign is India’s fiscal deficit, which most economists think is the source of many evils, from high inflation to the crowding out of private investment. The latest figures for April to November show that overall borrowing levels have reached 80% of the government’s target for the full year. Unless something dramatic happens very soon, the government will miss its target to cut central government borrowing to 5.3% of GDP for the fiscal year ended March (including the deficits of state governments this equates to an overall deficit of 8-9%).

Words are important—after all a recovery is partly about engendering optimism. And perhaps the finance ministry is saving up a range of actions ahead of the budget in February. But in the four months since the reform package was announced there has been too much talk and too little action. Right now, when global markets are upbeat, that doesn’t matter. But India today is more dependent on the grace of outside capital flows than ever. The latest current account deficit figures for the second quarter of the fiscal year came in at a queasy 5.4% of GDP. If the mood globally were to change—thanks, say, to another lurch down in the eurozone—talk will not be enough.