The global recession and its impact on india

A recession is generally considered less severe than a depression, and if a recession continues long enough it is often then classified as a depression.

While the initial effect of the crisis was profound on the US financial institutions and to a lesser extent on European institutions, the effect on emerging economies was less serious. Similarly, government final consumption expenditure GFCE in the first half of grew at less than 1 per cent, or just one-third of the growth in first half of Economic recession is a phase where there is severe contraction in economic activities.

The growth in private final consumption expenditure PFCE in of the first half was 3. All desirable economic conditions like high employment, high growth, stability in currency rate etc increasingly become challenging under economic recession.

Financiers reversed Flows into India, but long-term investors in plant and factories completed their ongoing projects. Owing to lowering of demand and several other adverse economic factors that were brought upon by economic recession.

Some of the causes of economic recession There are many economic factors that can cause recession. The depending of the global crisis and subsequent deleveraging and risk aversion however affected the Indian economy leading to slowing of growth momentum.

Subsequently, credit growth decelerated sharply to By this measure, four periods since qualify: Consequently, with the bursting of the bubble the initial impact would be a growth collapse, followed by a return in the medium term to growth rates that prevailed beforebecause of the painful process of de-leveraging and collapse of capital flows.

Prolong inflation or deflation in the economy 6. The subprime mortgage crisis which led to market crash around the world stands as a reminder that downturn in economy is one of the toughest times to deal with.

Indian banks however had very limited exposure to the US mortgage market, directly or through derivatives, and to the failed and stressed international financial institutions. Its origin lay in structured investment instruments Collateralized Debt Obligations, synthetic CDOs created out of sub-prime mortgage lending in the United States.

High Interest rates 4. There were many factors that saved the Indian economy from dire consequences of the global recession. It is also important to note that in the Indian economy recovered faster and GDP growth rate in was 8.

It has resulted in the collapse of large financial institutions, the bailout of banks by national governments and downturns in stock markets around the world.

Global economic recession and its impact on India

Despite these, however, Ml growth decelerated from It is considered by many economists to be the worst financial crisis since the Great Depression of the s. The US dollar however appreciated by 17 per cent against the broad index FRB, New York between March and Marchsuggesting that only 5 percentage points of the rupee depreciation was due to India-specific factors.

Built-up of over capacity 2. During the boom years, mortgage brokers attracted by the big commissions, encouraged buyers with poor credit to accept housing mortgages with little or no down payment and without credit checks.

A recession normally takes place when consumers lose confidence in the growth of the economy and spend less. In a globalised world, however, the natural process of transmission of contagion operating through the trade, capital flows and confidence channels affected the domestic economic and financial conditions.

Till date, the world has witnessed a number of economic recessions that brought the trade market to a standstill and left the economists and analysts with valuable lessons to be learnt for future. The drying up of liquidity, a fallout of repatriation of portfolio investments by FIIs, affected credit markets in second half of The upward jump in Indian growth between and however seems to coincide with a similar jump in global and OECD growth.

The securitization process however was not backed by due diligence and led to large-scale default. The direct impact of the crisis on financial sector was primarily through exposure to the toxic financial assets and the linkages with the money and foreign exchange markets.

The complexity of the instruments and the role of credit rating agencies played a contributory role. In this way risk was passed on multifold through derivatives trade.

Reserve money growth y-o-y collapsed from Mentioned below are some of the points that highlight major effects of economic recession on Indian economy 1 Economic growth faltered:Final Assigment on Global Recession and Its Impact on Human Resources Management.

Impact of Recession on Banks. & Effects of recession Stock Market & Recession Recession & Politics History of Recession Current crisis in the US Impact of recession in India Consequences of US Recession Conclusion Bibliography3/5(2).

Impact of Global Recession on Indian IT Industry and Effectiveness of E-Business in the Era of Recession Nidhi Arora Kumar Impact of Global Recession on Indian IT Industry 11 Impact of Recession on India.

NDTV News Video. Global economic recession and its impact on India.

Global Financial Crisis and Its Impact on India’s Growth

PUBLISHED ON: October 17, | Duration: 22 min, 11 sec. global recession and its impact on indian economy Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising.

If you continue browsing the site, you agree to the use of cookies on this website. This is evident from the way the Indian markets crashed taking a cue from a probable recession in the US and a global economic slowdown.

• Weakening of the American economy is bad news, not just for India, but for the rest of the world too. What Is Recession? • A recession is a contraction phase of the business cycle.5/5(82). Impact of Economics Recession on Indian Economy India’s integration into global economy steadily increased sincethe year when India finally opened up its highly socialized and conservative economy.

The global recession and its impact on india
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