Scribd
Upload
12 views2 pages

Impact of Global Recession on India

India is experiencing the effects of the global recession, though it is better poised to weather it than many other nations. It is estimated that India's GDP growth will slow by 1-2% in the coming fiscal year. The recession began in the US with the collapse of the housing market and spread worldwide. While no country is entirely insulated, India's economy remains relatively strong compared to others. The recession has impacted several of India's important sectors, but the government claims its effects on India will be minimal. The global recession serves as a reminder that unlimited growth is unsustainable and not backed by real financial resources.

Uploaded by

Rhythdm Malhotra
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
12 views2 pages

Impact of Global Recession on India

India is experiencing the effects of the global recession, though it is better poised to weather it than many other nations. It is estimated that India's GDP growth will slow by 1-2% in the coming fiscal year. The recession began in the US with the collapse of the housing market and spread worldwide. While no country is entirely insulated, India's economy remains relatively strong compared to others. The recession has impacted several of India's important sectors, but the government claims its effects on India will be minimal. The global recession serves as a reminder that unlimited growth is unsustainable and not backed by real financial resources.

Uploaded by

Rhythdm Malhotra
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Recession: Riches to rags 

India is experiencing a tough time as global recession hits its shores. It is estimated that
the GDP growth rate would come down by 1-2 per cent in the next fiscal year. The global
recession is a wakeup call to realise that greed takes us nowhere
CJ: JournalistJoe 

  
Mon, Mar 16, 2009 16:59:24 IST
Views:
1884
    Comments: 
1
Rate:            3.57 / 7 votes
India News Today : 
India better poised amidst global recession
AROUND THE world, economic recession has seeped into everyone’s life.
Our comfortable lifestyle has been shaken by the hard reality that there is
less money in the world. Lehmann Brothers, the fourth largest investment
bank in the US was filed for bankruptcy. Merill Lynch has been bought by
the Bank of America, 80,000 jobs were cut last year in the US and
unemployment rate has risen to 5.1 per cent, highest in 15 years. No
place in the world is safe.    

The recession started in the US, soon spreading all over the world.
Usually banks give loans to people who are credit worthy (those who will
be able to repay) but in the US, banks started giving loans to people who
were not credit worthy, known as subprime borrowers. This was done on
the belief that the real estate boom would help them repay. Even the
government encouraged lenders to lend to the subprime borrowers. When
the housing rates started falling, subprime lending turned into a subprime
crisis. The US economy started collapsing and soon, economies around
the world started falling like a pack of cards. 

India is not insulated from the effects of global recession as its ripples have
also passed through India. In our country, there are 27 million credit card
holders and many work in US based companies. No sooner did recession
start in the US, then these companies started cutting jobs. Jobless,
people were not able to pay back. Banks around the country were
affected by this phenomenon and thus, began the economic crisis in
India.  

It is estimated that the GDP growth rate would come down by 1-2 per
cent in the next fiscal year. The profit margin of companies dealing with
the US is shrinking. The export industry has been badly affected by
recession. Growth in recent years has been severely affected by the
depreciating dollar. Many textile industries have shut down. Recession has
spread its tentacles into some very important sectors of the Indian
economy. From IT and IT enabled services to jewelry, handicrafts and the
leather industry, losses are the new reality as their trade is linked with
the US. 

The globalisation of Indian economy made the stock market vulnerable to


the effects of recession. In January 2008, the sensex crashed by nearly
13 per cent in just two weeks. In October 2008, the sensex ended with a
of loss of 800 points inspite of an assurance given by Prime Minister
Manmohan Singh and former Finance Minister P Chidambaram. 

The recession has even affected the once booming Aviation industry,
which crashed down severely. Jet Airways and Kingfisher has terminated
over a 1000 jobs. The recession has even cut air travel, which has led to
huge losses. The recession has put a freeze on the market and there are
no jobs in the media, automobiles, outsourcing and exports. The global
meltdown has drifted slowly to every corner of Indian market. On the
other hand, the government is claiming that effects of recession on the
Indian economy would be very minimal.

For decades the world economy was based on dreams, fantasies and
promises. There was a promise to expand the economy but everyone
forgot that there wasn’t enough money in the world. The global recession is
a wakeup call to realise that greed takes us nowhere.

You might also like