Global Financial Crisis Presentation

8/9/2019 Global Financial Crisis Presentation

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Introduction

We will try to understand the impactof the global financial crisis on theIndian economy in the light of the

recent happenings.


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Impact on the Indian Economy

The global financial crisis has alreadyaffected our economy on various fronts.The information gleaned from Businesspages of The Tribune, Chandigarh,between Oct. 1 and Nov. 22, 2008, points

towards the extent of the problem.


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The Key Pointers

Fall in Share PricesAfter gradual fall in theprevious weeks, the sensex

fell to 8510, on 27.10.08, thelowest in 5 years

Fall in Rupee

On 21.11.08, Rupee hitsrecord low of 50.20, againstthe greenback.


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The Key Pointers

Impact on Exports

Exports are likely to slide by

20 per cent of its target of $200 billion in 2008-09

Fall in Forex Reserves

Forex reserves dropped bynearly $8 billion in earlyOctober, to $284 billion


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The Key Pointers

FDI InflowGlobal meltdown may slow down FDIinflows.

Job LossAcross all sectors manufacturing,retail, realty, IT and BPO, bankingand financial services

Economic GrowthSlow down has begun and growthwill drop to about 7 percent, for the

first time in 3 years


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The Key Pointers

Impact on various industriesSteel manufacturers,

Textile Sector, Hosiery,

Sports Goods,

IT, ITeS, BPO, KPO,

Diamond Exports,Real Estate, and many others

have started feeling the heat


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Action by Govt.

SEBI eases Participatory-Note norms,Lifts 40 percent cap on overseas

derivative instruments

RBI injects 20,000 crore for MutualFunds

The CRR, the amount banks are

required to keep with the apex bank,

has been cut from 9 per cent earlier to

5.5 per cent in three tranches.

Short-term lending (repo) rate also

reduced


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Action by Govt.

Rs 25,000 crore against farm debtwaiver

A temporary 1 per cent reduction in

SLR announced last month would bemade permanent.

High-level panel to address industrys

woes

Market regulator SEBI is keeping

vigilant eye on short-selling and on

the settlement mechanism.


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Government SpeakPrime Minister

Growth Rate 7.5 to 8 percent

Country not immune to what happens in the world

Finance Minister P. Chidambaram

Adequate liquidity in the banking system

Advised banks to lend aggressively

Asked investors not to sell stocks in panic

Commerce and Industry Minister - Kamal Nath

Financial crisis may slow down FDI inflows.Planning Commission Dy. Chairperson - MontekSingh Ahluwalia

Global meltdown to hit growth


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Expert Speak

Dr Rajiv Kumar, Director and Chief Executive, ICRIER

A growth of not more than 7.8 per cent in the

present year.

Dr L.K. Malhotra, President, PHDCCIIndia may not be able to remain untouched by

the financial turmoil in the US. Exports from

India are also likely to be hit if major economies

go into recession.

Sajjan Jindal, President , ASSOCHAM

India will see downturn and it will be an uphill

task for the government to bring back the

economy on rails


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Lessons Learnt

oWeaknesses of structuredproducts and derivatives

o

Importance of Financialsupervision

oInter-agency coordination

required

oWe can not remain

insulated


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Whats in the store

As per a report prepared jointly byWorld Economic Forum (WEF) and

Confederation of Indian Industry

(CII), the global crisis will hit

India more in 2009. At the global level also, Olivier

Blanchard, the IMFs chief

economist has said that worst offinancial crisis yet to come andeconomic growth would not kickin until 2010


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ConclusionThe Indian economy is already under the

impact of global financial crisis.Government has taken various steps but as

of now there are no signs of recovery.

Share prices have steadily fallen, rupee has

lost ground to the dollar, exports have been

hit, various sectors of the economy have

seen decline in demand and even the Prime

Minister has gone on record to say thatIndia has to bear the pain.

The point is that we have to live with the

present scenario for some more time to

come.


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THANK YOU!!!

Global Financial Crisis Presentation

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