Impact Of Global Recession On Indian Economy By

IMPACT OF GLOBAL RECESSION ON INDIAN ECONOMY BY Nisha Siraj Poornima Riyas

SUB-PRIME CRISES • The US Sub-Prime Crises was the reason for Global Recession • S u b p rime crisis means the borrower is below what is considered a prime candidate for a mortgage • An undervaluation of real risk

IMPACT OF GLOBAL RECESSION IN INDIA • Stock Exchanges based on US and Europe (FIIs) • Sudden sale of Stocks – Stock Market Crash & industries in general(no WC). • Exports come down • Layoffs • Work long for less salary • Rupee weakening against dollars • Banks on severe Cash Crunch

Global Recession • Loans to NINJA(No income, No Job, No Assets) • Sub-Prime Lending • ARM (Adjustable Rate Mortgage) • Reckless Lending • Increase in Loan Agents & Financial companies

“recession is the real killer not the terrorists” • Recession cuts down exports and cool investment - before Mumbai Blast • Decline in the economy began before attacks • 2 of 3 hotels & Café which were targets of attack have reopened the business

INDIA IS GROWING SLOW

Growth after Recession • Growth of 9.8% in 2007-08 • Expected growth is 7% but inflationary gap will reduce. • 10% Growth in 2010-11 • Best returns from stock markets

CHALLENGES AHEAD OF 2009 1. Getting inflation under control 2. Spreading the benefits of growth more equitably. 3. Completing investment projects which are essential for long term development of economy. 4. Dealing with global financial uncertainty, which will make capital flows and exports more difficult

PLUS AND MINUS PLUS ↓cost of living Export goods sold locally ↓products price

↓in real estate helps common man MINUS – – – –

Job Scarcity High Retrenchment Low Liquidity Hit in export market

Automobile Industry INDIA • Decline in Sales • September – best month into bad month • Tata, Maruthi Suzuki went under loss

Findings • Cutting CRR rate – money supply • • • •

China & India China – Manufacturing and exporting India – Selling the Services (KPO,BPO) 2 009 – Not so good – Barrack Obama to keep employement

• Good time to show India can work Independent

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