| India amidst turmoil |
The global financial tsunami hit Indian shores in 2008, albeit in a marginal way. The general lack of sentiment in the markets, nose-diving industrial production, shrinking GDP all reassert the, known yet not believed, truth that it’s a small world.
Undoubtedly India is facing the storm but importantly this storm is not of India`s making.
Although, the global financial crisis has its genesis in some of the most developed economies with the largest contributor being the United States, the ripple effect is being felt across the world.
In context of India and its economy, it’s well accepted that our economy, although weak, the fact that it is based on strong fundamentals with reasonably good amount of checks and balances has not gone unnoticed. But India is prone to the menace known as “risk sentiment” that has crept into the world system and making it looking battered.
The theory that the “problem” is very much real but not that serious in India gains credence as the rescue package announced by the government is worth only Rs 30,000 crore which is far less than the billions being pumped in by other global economies.
Considers this: The bailouts announced by governments across the world has crossed USD 10 trillion (about Rs 50,00,000 crore) -- an amount equivalent to nearly 10 times the size of the Indian economy.
On the GDP front, not everyone one is enthused enough to predict a good showing. International Monetary Fund (IMF) has also predicted that global economic growth would further slow to 2.2 percent from the earlier projection of 3 percent
In the Indian context, the matters are made worse with one global rating agency after the other downgrading India’s economic outlook and predicting a GDP growth rate of anywhere between 6% to 7.5%.
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