Thursday, March 12, 2009

The Global Crisis And Indian Finance

Initially, it was speculated that India would be totally immune to Global Financial Downturn. It is clear that important elements of the balance of payments and the domestic financial sector have been affected. The impact of such imbalance lead to implications in banking sector and has consequently lead to credit crunch.

The Chinese government, seriously noting the collapse in imports, has brought in a range of extensive fiscal and monetary measures designed to counteract the effects of the global downturn. As explained in my previous Post.

Recession has lead to downturn in many of the highly "Trade Integrated" economies of Southeast Asia that has sent in alarming signals and harsh indicators in those countries with no fault of theirs.

The current slowdown in Gross Development Product (GDP) is sharper than the Government would like to admit, and more significantly it has been accompanied by a much steeper than expected reduction in employment, especially in export sectors leading to volatility in economic infrastructure.

Some of the most important effects have been:

Decline in Foreign Exchange Reserves.



Decline in Stock Market Indices (BSE).




Weakening of Rupee in consideration to US Dollars.




Foreign Institutional Investors and Stock Market.



4 comments:

Ankit Poddar said...

Vinit,

i once read in some article in the outlook, that we could either be isolated from the sea, by having our boats at the shores, or rise and fall with the tides of the sea, in regards to globalization!

i guess it is better to be in the sea, than at the shores!

Shaurya Srivastava said...

Oh my God!!! I am understanding each and every word of this post. No need of answers.com or online dictionaries. This is amazing. Written simply. Very simple actually. Thanks to Vinit Thanvi. Now, I am getting into the skin of Economics. Again thanks to Vinit Thanvi. And people who just visit and don't comment.....Please do so....These comments actually boost up the writer....If you don't, sooner or later the writer will lose his interest and won't provide you with such informative and quite understandable material....He writes not for him but for us...Please comment on the posts so that the writer can come up with much more and even above your expectations....Thanks Vinit!!! Keep posting and I am sure that the people will boost you up.

Divine Interception said...

Ankit,

According to me in sea is a bit dangerous when you dont know the exact shores(stimulus) and what makes it more worse is when you are unable to swim(no bailing out).

So be like Berkshire Hathaway who have been fishing with nets but never left their boundaries making them rather Isolant.

Seeing from point of view of india, we were assumed to be on a place where the storm would not converge. But this world is full of uncertainties.

So seeing ourselves in Sea is a risk, which is correct frm ur point
of view may be rewarding when u have sufficient backups.

Divine Interception said...

Shaurya,

Thanks for your comment.

I appreciate your visiting to my blog.