Impact of Global Economic Crisis in India

Abstract

The perception that the crrent global economic crisis is primarily a financial crisis resulting from excessive exuberance and inadequate regulation of the financial sector is at best superficial, if not downright misleading. Globalization has ensured that the lndia11 economy and financial markets cannot stay insulated from tale present financial crisis in the developed economies. The debate, therefore, can only be 011 the exte11t of impact and how resilient India is to withsta11d the storm with minimal damage. [11 the light of the fact that the Indian economy is linked to global markets tlzrouglz a full float i11 wrrent account (trade and seroices) and partial float in capital accou11t (debt and equity), and there is the need to analyze the impact based on three critical factors: Availability of global liquidity; demand for India investment a11d cost thereof and decreased consumer dema11d affecting Indian exports