Impact of global Financial Crisis on the Indian economy

Abstract

The global financial crisis has originated in the sub-prime mortgage crisis in USA during 2007. The Government India has been concerned about the impact of the global financial crisis on the Indian economy and a number of steps have been taken to cope up with this problem. This paper presents a brief overview of the factors that led to the collapse of the financial markets around the world. It examines the Government of India’s response to the financial crisis through stimulus packages. It also discusses the steps taken by Reserve Bank of India to deals with the problem of global financial meltdown. It analyzed the impact of all these steps taken by Government and RBI on different macroeconomic variables in India during the crisis time period. The Indian economy has proved relatively resilient in the face of the global economic crisis. India’s large domestic market, along with government fiscal measures, a number of social programmes and a strong banking system have helped to mitigate the impact of the drop in demand in export markets.

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