• ISSN: 2010-023X (Print)
    • Abbreviated Title: Int. J. Trade, Economics and Financ.
    • Frequency: Quaterly
    • DOI: 10.18178/IJTEF
    • Editor-in-Chief: Prof.Tung-Zong (Donald) Chang
    • Managing Editor: Ms. Shira. W. Lu
    • Abstracting/ Indexing:  Crossref, Electronic Journals Library , EBSCO
    • E-mail: ijtef.editorial.office@gmail.com
IJTEF 2011 Vol.2(3): 212-217 ISSN: 2010-023X
DOI: 10.7763/IJTEF.2011.V2.105

Recent Global Recession and Indian Economy: An Analysis

Rajiv Kumar Bhatt

Abstract—Today, India is much more integrated with the world economy through both the current and capital accounts. The down turn that appears to have begun in the USA in September, 2008 have some negative impact on Indian economy. The most immediate effect of this global financial crisis on India is an out flow of foreign institutional investment (FII) from the equity market. This withdrawal by the FIIs led to a steep depreciation of the rupee. The banking and non-banking financial institutions have been suffering losses. The recession generated the financial crisis in USA and other developed economies have adversely affected India’s exports of software and IT services. For fighting this crisis, government of India responded through its monetary policy by pumping the liquidity into the system rather than using effective fiscal policy i.e. public expenditure and investment to face the recession. No doubt, government has introduced three fiscal stimulus packages for stimulating demand in the economy but it was not sufficient, the larger government expenditure should be oriented towards agriculture and infrastructure. Although India has revived to high growth, this new growth should have to come not from some new speculative bubble but from enlarged government expenditure that directly improves the livelihood of the people. The present paper is an attempt to analyze the impact of recent global financial crisis on Indian economy. The paper is divided into three sections. In the first introductory section, we have discussed the features of recent global financial meltdown. The section two deals with the impact of this crisis on Indian economy and discusses how India came back to high growth. Conclusion and suggestions have been given in the third section.

Index Terms—Depreciation, foreign institutional investment (FII), global financial meltdown, India, recession.

Rajiv Kumar Bhatt is with the Department of Economics, Banaras Hindu UniversityVaranasi-221005, India(e-mail: rkbhatt_eco@yahoo.com).


Cite:Rajiv Kumar Bhatt, "Recent Global Recession and Indian Economy: An Analysis," International Journal of Trade, Economics and Finance vol.2, no.3, pp. 212-217, 2011.

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