Title: India's economy amidst the global economic crisis

Authors: Amit Kumar Giri; Babita Sinha

Addresses: Department of Humanities and Social Sciences, Indian Institute of Technology, 247667, Uttarakhand, India ' Department of Humanities and Social Sciences, Indian Institute of Technology, 247667, Uttarakhand, India

Abstract: The world's economy is in crisis for over five years; consequently, many of the countries of this world are witnessing unprecedented fall in output, trade and employment since 2008; and India's economy is no exception. This study with the available sources of data finds that the decoupling hypothesis regarding Indian economy failed and India's economy too is in the grip of crisis. However, the moderation in India's economy growth rate during the crisis period is more due to the weakness in the inherent structural factors and to a very less extent due to exogenous factors. The Indian economy in recent years is bedevilled with low rate of capital formation, decline in manufacturing and moderation in services sector growth coupled with stagnancy in the private consumption expenditure. Also, India's exports are witnessing decline, more with those nations with whom India has free trade agreements, without any concomitant decline in imports, which has severely impacted India's balance of payments situation. In addition, the continuing political instability and the inward looking policies of the government in recent years has added to the decline of India's output and consequently affected its scope of employment generation and poverty reduction.

Keywords: Eurozone; sovereign debt crisis; decoupling theory; quantitative easing; employment; Free Trade Agreements; FTAs; current account deficits; India; economic growth; output reduction; poverty reduction; Indian economy.

DOI: 10.1504/IJEBR.2014.064122

International Journal of Economics and Business Research, 2014 Vol.8 No.2, pp.205 - 226

Received: 25 Jan 2013
Accepted: 23 Jul 2013

Published online: 02 Aug 2014 *

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