Global Economic Crisis And India

Want to read the rest of this paper? Join Essayworld today to view this entire essay and over 50,000 other term papers

achieving short term goals and ignoring warnings from leading economists about long term sustainability of the policy, backfired completely and companies like Lehmann Brothers, Merill Lynch, Freddie Mac and Fannie Mae's "bad assets" reached magnanimous proportions.

An acute credit shortage was experienced in the economy, and simultaneous negative effects started occurring. The credit crunch meant that borrowing interest rates shot up in the market, companies slowed down their investment policies, production declined, lay offs increased, consumption decreased and the whole economy followed the downward spiral. The unemployment rate in the US reached an all time high of 6.1% and industrial growth saw its largest decline in the past three years and fell to 1.1%. The US governments realized the gravity of the situation, and started using monetary as well as fiscal policies to check the diminishing economy. Fiscal policy boost in the way that, an amount of around US$ 1 trillion was ...

Get instant access to over 50,000 essays. Write better papers. Get better grades. Already a member? Login

then, the world economy has been affected by this deep economic crisis and India is no different. India being a net import driven economy, with exports (including the service sector) contributing 17% of GDP, is a little less vulnerable than other economies. Moreover we still have a socialistic pattern of economy where there is enough government intervention, which has somewhat checked the situation from becoming graver. At the present scenario it is a bit difficult to exactly quantify the implications of the global financial meltdown, but a few salient features are:- :: Indian IT companies have around 30% exposure to foreign financial services.

:: Funding constraints would result in ...

Succeed in your coursework without stepping into a library. Get access to a growing library of notes, book reports, and research papers in 2 minutes or less.

CITE THIS PAGE: