The Global Financial Crisis on India Essay

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Why do you think India remained relatively insulated from the financial crises?
"The contagion is truly global in a globalized world. How can the high
priests of globalization in India expect to insulate the country from
this all-pervasive crisis?"
- By S. Shivaraman
It is not right to say that a country is insulated from financial crisis in today’s globalized world. In some way or the other there will be an effect of failed programme of one country on the other. The moment we say that we are global (global meaning when we do not have any restriction on transactions with other geography’s), we become non-insulated to the
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Indian economy has been affected by the financial crisis but the effect is less for which there exists various reasons. But it does not mean that it is not affected at all, the individual areas show the effect of these financial crises in the economy. In this paper I will write about the reason for both why the effect was less and the areas which were affected by the financial crisis and how.
“At the outset, it must be admitted that the abundant caution exercised by the former RBI Governor, Dr. Y. V. Reddy and going slow on opening up new complex financial products helped to insulate the country’s from a major financial crisis” .
There have been reflective discussions on the effects of the Global Financial Crisis on India. Facts tell us that while the world economy seemed to be collapsing in 2008/09, India’s GDP expanded by 6.7%. The Federal Bank and the Bank of England cut their policy rates to rock-bottom levels to 0.25% and 0.50% respectively . This action was a means of adopting an expansionary monetary policy in pursuit of enhancing economic activity and investment amongst consumers and firms. At every Central Bank meeting, during the past 2 years, we saw governors extremely concerned about the recession. They did whatever they could to pick up the economy and boost consumer confidence. When interest rates reached their minimum levels, their hands were tied and they needed to look for another tool. Over the…