Global meltdown-challenges to indian economy

Economic recession is one of the stages in economic system affecting world economy in an adverse manner. Economic recession occurs at frequent intervals. But recession of 1929-39 lasts for 10 years sweeping world economy at it had worst economic impact disturbing the economic activities specially in case of developing economies like India. Economic recession is mainly due fall or uncertain in prices of securities listed on stock exchange disinvestment low capital formation fall in inflow of FDI, decreasing purchasing power and dull trend in banking and financial sectors, declining GDP, export growth and decreasing trend in employment opportunities, slow down in industrial growth and process of economic development. However we can list out the adverse impact on economy. Global financial and economic crises global economic recession or meltdown had mixed impact of India economy both positive and negative affected. Balancing factors Major Challenges some of them are highlighted here. Current global financial crisis has thrown up unprecedented external challenges for India in navigating high growth process in the coming years. The global economic slowdown has hit the vital sectors of our economy. The dimensions and intensity of the crisis become more comprehensible in the coming days. It is necessary for both the Government and the RBI to become more proactive with respect to its policy stance. With global economy hurtling towards recession India’s growth path cannot remain unscathed. It is suggested that effective and smoother liquidity managements and credit availability or similar monitory policy measures will not be enough. The policy makers may have to evaluate other policy options especially imperatives of fiscal expansion. Such options must be anchored with the essence of fiscal governance.