The global financial crisis of 2008 is the most severe financial crisis that the world has ever faced since the Great Depression of 1930s.The ‘Financial Crisis of 2008’,also called the US Meltdown has its origin in the US housing sector back in 2001-02,but gradually extended over a period of time and eventually brought the entire world under its grip.And India also get affected by it.In this slides we discussed the major effects

2. GLOBAL FINANCIAL CRISIS :-
a worldwide financial fia$co, is an
economic recession or depression
caused by lack of necessary
liquidity in financial institutions.

5. Low
rate of
interest
Property
bubble
Deterioration of
financial standards
and bad regulation
Financial innovation
and lack of
transparency
Burst of
property bubble
Problem in
fulfilling subprime
mortgage
obligations
Loss of
financial
and
investors
Reassessing
risks and
risk taking
Increase in
counter party risk
, losses
Financing
possibilities
have
narrowed
Cost of
financing has
increased
Impact on
financial
markets and
economy
Tightening
credit
condition
Excessive financing Spreading risk

6. *** The Global Financial Crisis has not left
the “ INDIA” unscathed………***

7. GLOBAL LIQUIDITY CRUNCH AND THE INDIAN ECONOMY
Large selling
by foreign
institutional
investors(FII)
Subsequent
interventions
by RBI in
foreign
currency
market
,continuing
growth in
advances
Earlier
increases in
cash reserve
ratio(CRR )to
contain
inflation

8. Impact on Export of India
Indian shipment decline 33.3%
( biggest decline since last 14 years)

9. EXPORTShipments of Indian
natural pearls, precious
and semi precious
stones &
pharmaceutical product
dropped by 22.63%
trade between USA
and India decline by
23.47% (in 1st Q of
2009)
Indian gems and
jewellery sector also
decline
Textiles and clothing
export dropped by
14.09% in 20008-09 FY
Declination in
Indian export to
USA
(in 1st Q of 2009)

10. Impact on Stock
market
Foreign investors have pulled out from stock
markets leading to losses in stock and mutual
funds.
Because of such uncertainty Many people
started saving money in banks rather than
investment
More people sold the shares in the Indian
market than they bought during this period .
This resulted the fall of sensex to lower points.

11. Table : Sensex & Foreign Investments
Year Total Foreign
Investment
BSE Sensex
(Base : 1978-79
=100)
1999-00 22450 4658.63
2000-01 31015 4269.69
2001-02 38874 3331.95
2002-03 29105 3206.29
2003-04 72139 4492.19
2004-05 69042 5740.99
2005-06 94981 8278.55
2006-07 135080 12277.33
2007-08 249921 16568.89
2008-09 110123 12365.55
2009-10 332575 15585.21
2010-11 281897 18605.18
0
50000
100000
150000
200000
250000
300000
350000
400000
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
Graph:- Sensex and total foreign
investment relation
BSE Sensex (Base : 1978-79 =100)
Total Foreign Investment

12. 2009
2008
2007
Lowering of Growth rate of
indian economy
9%
8.4%
Year GDP- Growth rate (%)
1999 5.5
2000 6
2001 4.4
2002 4.3
2003 8.3
2004 6.2
2005 8.4
2006 9.2
2007 9
2008 8.4
2009 7.4
2010 10.4

14. 1.
2.
3.
4.
The factors responsible for slow down of India’s IT export growth

15. year Unemployment %
2002 8.8
2003 8.8
2004 9.5
2005 9.2
2006 8.9
2007 7.8
2008 7.2
More than 500,000 jobs were lost
during the last 3 months of 2008 in
export oriented sector including gems
and jewellery
 many workers lost jobs in
diamond jewellery , textiles and
leather industry
 the crisis had affected the RS 3000
crores handloom industry and
volume of handloom exports
dropped by 4.6% in 2007-08
creating widespread unemployment
in this sector
 companies in IT industry have
stopped hiring and projected lower
manpower need
Job lost

16. The impact of global financial crisis on some
important macroeconomic variables
Decline in the
stock market
indices
Fall in the
external values of
rupee, especially
vis-a-vis
the dollar
Decline in the
foreign exchange
reserves held by
the reserve
bank of India

20. POSITIVE IMPACTS ON INDIAN ECONOMY
Expose of weaknesses in the economy
Cost stabilization in real estate market
Rationalization of salary structure in IT Industry
Performance appraisal is gaining ground
Austerity is targeted path
Best place for outforcing
Opportunities for international trade

21. www.indianmba.com
www.economywatch.com
www.google.co.in.imghp
www.slideshare.net
Orfonline.org
www.indiapress.com
www.independent.org
rbi.org.in
www.economictimes.com
www.timesofindia.com
Reference